Correlation Between Chesapeake Energy and AgroFresh Solutions
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and AgroFresh Solutions at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chesapeake Energy and AgroFresh Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and AgroFresh Solutions, you can compare the effects of market volatilities on Chesapeake Energy and AgroFresh Solutions and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chesapeake Energy with a short position of AgroFresh Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and AgroFresh Solutions.
Diversification Opportunities for Chesapeake Energy and AgroFresh Solutions
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and AgroFresh is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and AgroFresh Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgroFresh Solutions and Chesapeake Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chesapeake Energy are associated (or correlated) with AgroFresh Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgroFresh Solutions has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and AgroFresh Solutions go up and down completely randomly.
Pair Corralation between Chesapeake Energy and AgroFresh Solutions
If you would invest 7,430 in Chesapeake Energy on January 31, 2024 and sell it today you would earn a total of 234.00 from holding Chesapeake Energy or generate 3.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 4.76% |
Values | Daily Returns |
Chesapeake Energy vs. AgroFresh Solutions
Performance |
Timeline |
Chesapeake Energy |
AgroFresh Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Energy and AgroFresh Solutions Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chesapeake Energy and AgroFresh Solutions
The main advantage of trading using opposite Chesapeake Energy and AgroFresh Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, AgroFresh Solutions can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AgroFresh Solutions will offset losses from the drop in AgroFresh Solutions' long position.Chesapeake Energy vs. Chesapeake Energy | Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
AgroFresh Solutions vs. SW Seed Company | AgroFresh Solutions vs. Local Bounti Corp | AgroFresh Solutions vs. Edible Garden AG | AgroFresh Solutions vs. Limoneira Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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