Correlation Between Chart Industries and Integrated Drilling

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

By analyzing existing cross correlation between Chart Industries and Integrated Drilling Equipment, you can compare the effects of market volatilities on Chart Industries and Integrated Drilling 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 Integrated Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Integrated Drilling.

Diversification Opportunities for Chart Industries and Integrated Drilling

0.0

Correlation Coefficient

Chart Industries  Integrated Drilling

Pay attention - limited upside

The 3 months correlation between Chart and Integrated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Integrated Drilling Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Drilling 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 Integrated Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Drilling has no effect on the direction of Chart Industries i.e., Chart Industries and Integrated Drilling go up and down completely randomly.

Pair Corralation between Chart Industries and Integrated Drilling

If you would invest  18,860  in Chart Industries on October 23, 2024 and sell it today you would earn a total of  2,564  from holding Chart Industries or generate 13.59% return on investment over 90 days.

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

Chart Industries  vs.  Integrated Drilling Equipment

Chart Industries

Risk-Adjusted Performance

27 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chart Industries are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Chart Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Integrated Drilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Drilling Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Integrated Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chart Industries and Integrated Drilling

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

The idea behind Chart Industries and Integrated Drilling Equipment 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.