Correlation Between Jensen Portfolio and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Jensen Portfolio and The Chesapeake 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 Jensen Portfolio and The Chesapeake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Jensen Portfolio and The Chesapeake Growth, you can compare the effects of market volatilities on Jensen Portfolio and The Chesapeake 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 Jensen Portfolio with a short position of The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jensen Portfolio and The Chesapeake.
Diversification Opportunities for Jensen Portfolio and The Chesapeake
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jensen and The is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Jensen Portfolio and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth and Jensen Portfolio 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 The Jensen Portfolio are associated (or correlated) with The Chesapeake. 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 Jensen Portfolio i.e., Jensen Portfolio and The Chesapeake go up and down completely randomly.
Pair Corralation between Jensen Portfolio and The Chesapeake
Assuming the 90 days horizon Jensen Portfolio is expected to generate 3.89 times less return on investment than The Chesapeake. But when comparing it to its historical volatility, The Jensen Portfolio is 1.16 times less risky than The Chesapeake. It trades about 0.07 of its potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,352 in The Chesapeake Growth on May 30, 2025 and sell it today you would earn a total of 512.00 from holding The Chesapeake Growth or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Jensen Portfolio vs. The Chesapeake Growth
Performance |
| Timeline |
| Jensen Portfolio |
| Chesapeake Growth |
Jensen Portfolio and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jensen Portfolio and The Chesapeake
The main advantage of trading using opposite Jensen Portfolio and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jensen Portfolio position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Jensen Portfolio vs. The Jensen Portfolio | Jensen Portfolio vs. T Rowe Price | Jensen Portfolio vs. Champlain Mid Cap | Jensen Portfolio vs. Massachusetts Investors Growth |
| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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