Correlation Between Chart Industries and Nordson

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

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

Diversification Opportunities for Chart Industries and Nordson

-0.53

Correlation Coefficient

Chart Industries  Nordson

Excellent diversification

The 3 months correlation between Chart and Nordson is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Nordson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordson 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 Nordson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordson has no effect on the direction of Chart Industries i.e., Chart Industries and Nordson go up and down completely randomly.

Pair Corralation between Chart Industries and Nordson

Given the investment horizon of 90 days Chart Industries is expected to generate 2.32 times more return on investment than Nordson. However, Chart Industries is 2.32 times more volatile than Nordson. It trades about 0.05 of its potential returns per unit of risk. Nordson is currently generating about 0.0 per unit of risk. If you would invest  12,580  in Chart Industries on October 21, 2024 and sell it today you would earn a total of  8,844  from holding Chart Industries or generate 70.3% return on investment over 90 days.

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

Chart Industries  vs.  Nordson

Chart Industries

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chart Industries are ranked lower than 24 (%) 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.

Nordson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Chart Industries and Nordson

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

The idea behind Chart Industries and Nordson 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.