Correlation Between Cambiar Opportunity and Chesapeake Growth

Can any of the company-specific risk be diversified away by investing in both Cambiar Opportunity and Chesapeake Growth 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 Cambiar Opportunity and Chesapeake Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cambiar Opportunity Fund and The Chesapeake Growth, you can compare the effects of market volatilities on Cambiar Opportunity and Chesapeake Growth 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 Cambiar Opportunity with a short position of Chesapeake Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Opportunity and Chesapeake Growth.

Diversification Opportunities for Cambiar Opportunity and Chesapeake Growth

0.95

Correlation Coefficient

Cambiar Opportunity  Chesapeake Growth

Almost no diversification

The 3 months correlation between Cambiar and Chesapeake is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Opportunity Fund and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth and Cambiar Opportunity 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 Cambiar Opportunity Fund are associated (or correlated) with Chesapeake Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Cambiar Opportunity i.e., Cambiar Opportunity and Chesapeake Growth go up and down completely randomly.

Pair Corralation between Cambiar Opportunity and Chesapeake Growth

Assuming the 90 days horizon Cambiar Opportunity is expected to generate 1.86 times less return on investment than Chesapeake Growth. In addition to that, Cambiar Opportunity is 1.15 times more volatile than The Chesapeake Growth. It trades about 0.12 of its total potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.25 per unit of volatility. If you would invest  5,164  in The Chesapeake Growth on May 2, 2025 and sell it today you would earn a total of  611.00  from holding The Chesapeake Growth or generate 11.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Cambiar Opportunity Fund  vs.  The Chesapeake Growth

Cambiar Opportunity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cambiar Opportunity Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Cambiar Opportunity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chesapeake Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Chesapeake Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Chesapeake Growth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Cambiar Opportunity and Chesapeake Growth

The main advantage of trading using opposite Cambiar Opportunity and Chesapeake Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Opportunity position performs unexpectedly, Chesapeake Growth 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 Chesapeake Growth will offset losses from the drop in Chesapeake Growth's long position.

The idea behind Cambiar Opportunity Fund and The Chesapeake Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.