Correlation Between Chart Industries and Coty
Can any of the company-specific risk be diversified away by investing in both Chart Industries and Coty 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 Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chart Industries and Coty Inc, you can compare the effects of market volatilities on Chart Industries and Coty 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 Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Coty.
Diversification Opportunities for Chart Industries and Coty
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chart and Coty is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc 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 Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Chart Industries i.e., Chart Industries and Coty go up and down completely randomly.
Pair Corralation between Chart Industries and Coty
Assuming the 90 days trading horizon Chart Industries is expected to generate 1.41 times more return on investment than Coty. However, Chart Industries is 1.41 times more volatile than Coty Inc. It trades about 0.2 of its potential returns per unit of risk. Coty Inc is currently generating about 0.18 per unit of risk. If you would invest 7,000 in Chart Industries on November 3, 2024 and sell it today you would earn a total of 775.00 from holding Chart Industries or generate 11.07% 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. Coty Inc
Performance |
| Timeline |
| Chart Industries |
| Coty Inc |
Chart Industries and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chart Industries and Coty
The main advantage of trading using opposite Chart Industries and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chart Industries position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Chart Industries vs. Babcock Wilcox Enterprises | Chart Industries vs. Morgan Stanley | Chart Industries vs. National Storage Affiliates |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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