Correlation Between Chesapeake Utilities and DOCDATA

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

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

Diversification Opportunities for Chesapeake Utilities and DOCDATA

0.71

Correlation Coefficient

Chesapeake Utilities  DOCDATA

Poor diversification

The 3 months correlation between Chesapeake and DOCDATA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and DOCDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOCDATA and Chesapeake Utilities 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 Utilities are associated (or correlated) with DOCDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOCDATA has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and DOCDATA go up and down completely randomly.

Pair Corralation between Chesapeake Utilities and DOCDATA

Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.48 times more return on investment than DOCDATA. However, Chesapeake Utilities is 2.07 times less risky than DOCDATA. It trades about -0.08 of its potential returns per unit of risk. DOCDATA is currently generating about -0.08 per unit of risk. If you would invest  11,037  in Chesapeake Utilities on May 12, 2025 and sell it today you would lose (837.00) from holding Chesapeake Utilities or give up 7.58% of portfolio value over 90 days.

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

Chesapeake Utilities  vs.  DOCDATA

Chesapeake Utilities

Risk-Adjusted Performance

Weakest

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

DOCDATA

Risk-Adjusted Performance

Weakest

Over the last 90 days DOCDATA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Chesapeake Utilities and DOCDATA

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

The idea behind Chesapeake Utilities and DOCDATA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.