Correlation Between Chesapeake Utilities and RYOHIN UNSPADR/1

Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and RYOHIN UNSPADR/1 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 RYOHIN UNSPADR/1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chesapeake Utilities and RYOHIN UNSPADR1, you can compare the effects of market volatilities on Chesapeake Utilities and RYOHIN UNSPADR/1 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 RYOHIN UNSPADR/1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and RYOHIN UNSPADR/1.

Diversification Opportunities for Chesapeake Utilities and RYOHIN UNSPADR/1

-0.83

Correlation Coefficient

Chesapeake Utilities  RYOHIN UNSPADR/1

Pay attention - limited upside

The 3 months correlation between Chesapeake and RYOHIN is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and RYOHIN UNSPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYOHIN UNSPADR/1 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 RYOHIN UNSPADR/1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYOHIN UNSPADR/1 has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and RYOHIN UNSPADR/1 go up and down completely randomly.

Pair Corralation between Chesapeake Utilities and RYOHIN UNSPADR/1

Assuming the 90 days horizon Chesapeake Utilities is expected to under-perform the RYOHIN UNSPADR/1. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Utilities is 1.3 times less risky than RYOHIN UNSPADR/1. The stock trades about -0.09 of its potential returns per unit of risk. The RYOHIN UNSPADR1 is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  2,740  in RYOHIN UNSPADR1 on April 24, 2025 and sell it today you would earn a total of  1,140  from holding RYOHIN UNSPADR1 or generate 41.61% return on investment over 90 days.

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

Chesapeake Utilities  vs.  RYOHIN UNSPADR1

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

RYOHIN UNSPADR/1

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in RYOHIN UNSPADR1 are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, RYOHIN UNSPADR/1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chesapeake Utilities and RYOHIN UNSPADR/1

The main advantage of trading using opposite Chesapeake Utilities and RYOHIN UNSPADR/1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, RYOHIN UNSPADR/1 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 RYOHIN UNSPADR/1 will offset losses from the drop in RYOHIN UNSPADR/1's long position.

The idea behind Chesapeake Utilities and RYOHIN UNSPADR1 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.