Correlation Between Chart Industries and Hurco Companies

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

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

Diversification Opportunities for Chart Industries and Hurco Companies

-0.09

Correlation Coefficient

Chart Industries  Hurco Companies

Good diversification

The 3 months correlation between Chart and Hurco is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies and Chart Industries 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 Chart Industries are associated (or correlated) with Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Chart Industries i.e., Chart Industries and Hurco Companies go up and down completely randomly.

Pair Corralation between Chart Industries and Hurco Companies

Assuming the 90 days trading horizon Chart Industries is expected to generate 1.1 times more return on investment than Hurco Companies. However, Chart Industries is 1.1 times more volatile than Hurco Companies. It trades about 0.29 of its potential returns per unit of risk. Hurco Companies is currently generating about -0.07 per unit of risk. If you would invest  5,071  in Chart Industries on October 9, 2024 and sell it today you would earn a total of  2,590  from holding Chart Industries or generate 51.07% return on investment over 90 days.

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

Chart Industries  vs.  Hurco Companies

Chart Industries

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chart Industries are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Chart Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Chart Industries and Hurco Companies

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

The idea behind Chart Industries and Hurco Companies 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.