Correlation Between 09951LAA1 and Chart Industries

Can any of the company-specific risk be diversified away by investing in both 09951LAA1 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 09951LAA1 and Chart Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOOZ ALLEN HAMILTON and Chart Industries, you can compare the effects of market volatilities on 09951LAA1 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 09951LAA1 with a short position of Chart Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of 09951LAA1 and Chart Industries.

Diversification Opportunities for 09951LAA1 and Chart Industries

0.4

Correlation Coefficient

09951LAA1  Chart Industries

Very weak diversification

The 3 months correlation between 09951LAA1 and Chart is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BOOZ ALLEN HAMILTON and Chart Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chart Industries and 09951LAA1 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 BOOZ ALLEN HAMILTON 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 09951LAA1 i.e., 09951LAA1 and Chart Industries go up and down completely randomly.

Pair Corralation between 09951LAA1 and Chart Industries

Assuming the 90 days trading horizon BOOZ ALLEN HAMILTON is expected to generate 0.14 times more return on investment than Chart Industries. However, BOOZ ALLEN HAMILTON is 7.24 times less risky than Chart Industries. It trades about -0.1 of its potential returns per unit of risk. Chart Industries is currently generating about -0.06 per unit of risk. If you would invest  9,500  in BOOZ ALLEN HAMILTON on December 25, 2024 and sell it today you would lose (248.00) from holding BOOZ ALLEN HAMILTON or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.75%
Values	Daily Returns

BOOZ ALLEN HAMILTON  vs.  Chart Industries

BOOZ ALLEN HAMILTON

Risk-Adjusted Performance

Very Weak

Over the last 90 days BOOZ ALLEN HAMILTON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 09951LAA1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Chart Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chart Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with 09951LAA1 and Chart Industries

The main advantage of trading using opposite 09951LAA1 and Chart Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 09951LAA1 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.

The idea behind BOOZ ALLEN HAMILTON and Chart Industries 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.