Correlation Between Chesapeake Energy and Dynaresource

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

By analyzing existing cross correlation between Chesapeake Energy and Dynaresource, you can compare the effects of market volatilities on Chesapeake Energy and Dynaresource 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 Dynaresource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Dynaresource.

Diversification Opportunities for Chesapeake Energy and Dynaresource

-0.32

Correlation Coefficient

Chesapeake Energy  Dynaresource

Very good diversification

The 3 months correlation between Chesapeake and Dynaresource is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Dynaresource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynaresource 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 Dynaresource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynaresource has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Dynaresource go up and down completely randomly.

Pair Corralation between Chesapeake Energy and Dynaresource

If you would invest  81.00  in Dynaresource on September 13, 2024 and sell it today you would earn a total of  19.00  from holding Dynaresource or generate 23.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Chesapeake Energy  vs.  Dynaresource

Chesapeake Energy

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Chesapeake Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Chesapeake Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Dynaresource

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dynaresource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Dynaresource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chesapeake Energy and Dynaresource

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

The idea behind Chesapeake Energy and Dynaresource 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.