Correlation Between Power Solutions and Chart Industries
Can any of the company-specific risk be diversified away by investing in both Power Solutions and Chart Industries 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 Power Solutions and Chart Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Solutions International, and Chart Industries, you can compare the effects of market volatilities on Power Solutions and Chart Industries 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 Power Solutions with a short position of Chart Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Solutions and Chart Industries.
Diversification Opportunities for Power Solutions and Chart Industries
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Power and Chart is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Power Solutions International, and Chart Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chart Industries and Power Solutions 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 Power Solutions International, are associated (or correlated) with Chart Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chart Industries has no effect on the direction of Power Solutions i.e., Power Solutions and Chart Industries go up and down completely randomly.
Pair Corralation between Power Solutions and Chart Industries
Given the investment horizon of 90 days Power Solutions International, is expected to generate 3.93 times more return on investment than Chart Industries. However, Power Solutions is 3.93 times more volatile than Chart Industries. It trades about 0.23 of its potential returns per unit of risk. Chart Industries is currently generating about 0.32 per unit of risk. If you would invest 2,589 in Power Solutions International, on October 23, 2024 and sell it today you would earn a total of 916.00 from holding Power Solutions International, or generate 35.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Power Solutions International, vs. Chart Industries
Performance |
Timeline |
Power Solutions Inte |
Chart Industries |
Power Solutions and Chart Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Power Solutions and Chart Industries
The main advantage of trading using opposite Power Solutions and Chart Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Solutions position performs unexpectedly, Chart Industries 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 Chart Industries will offset losses from the drop in Chart Industries' long position.Power Solutions vs. Chart Industries | Power Solutions vs. Nordson | Power Solutions vs. Helios Technologies | Power Solutions vs. Thermon Group Holdings |
Chart Industries vs. Crane NXT Co | Chart Industries vs. Donaldson | Chart Industries vs. ITT Inc | Chart Industries vs. Franklin Electric Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |