Correlation Between ISE Chemicals and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both ISE Chemicals and Chesapeake Utilities 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 ISE Chemicals and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISE Chemicals and Chesapeake Utilities, you can compare the effects of market volatilities on ISE Chemicals and Chesapeake Utilities 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 ISE Chemicals with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISE Chemicals and Chesapeake Utilities.
Diversification Opportunities for ISE Chemicals and Chesapeake Utilities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ISE and Chesapeake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ISE Chemicals and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and ISE Chemicals 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 ISE Chemicals are associated (or correlated) with Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of ISE Chemicals i.e., ISE Chemicals and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between ISE Chemicals and Chesapeake Utilities
If you would invest 12,045 in Chesapeake Utilities on July 28, 2025 and sell it today you would earn a total of 1,142 from holding Chesapeake Utilities or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
ISE Chemicals vs. Chesapeake Utilities
Performance |
| Timeline |
| ISE Chemicals |
| Chesapeake Utilities |
ISE Chemicals and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISE Chemicals and Chesapeake Utilities
The main advantage of trading using opposite ISE Chemicals and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISE Chemicals position performs unexpectedly, Chesapeake Utilities 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 Utilities will offset losses from the drop in Chesapeake Utilities' long position.| ISE Chemicals vs. Cal Bay Intl | ISE Chemicals vs. Worldwide Holdings Corp | ISE Chemicals vs. One World Ventures | ISE Chemicals vs. First State Financial |
| Chesapeake Utilities vs. MGE Energy | Chesapeake Utilities vs. Excelerate Energy | Chesapeake Utilities vs. American States Water | Chesapeake Utilities vs. Avista |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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