Correlation Between Chart Industries and Smurfit WestRock

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Can any of the company-specific risk be diversified away by investing in both Chart Industries and Smurfit WestRock 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 Smurfit WestRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chart Industries and Smurfit WestRock plc, you can compare the effects of market volatilities on Chart Industries and Smurfit WestRock 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 Smurfit WestRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Smurfit WestRock.

Diversification Opportunities for Chart Industries and Smurfit WestRock

ChartSmurfitDiversified AwayChartSmurfitDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Chart and Smurfit is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Smurfit WestRock plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smurfit WestRock plc 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 Smurfit WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smurfit WestRock plc has no effect on the direction of Chart Industries i.e., Chart Industries and Smurfit WestRock go up and down completely randomly.

Pair Corralation between Chart Industries and Smurfit WestRock

Assuming the 90 days trading horizon Chart Industries is expected to under-perform the Smurfit WestRock. In addition to that, Chart Industries is 1.22 times more volatile than Smurfit WestRock plc. It trades about -0.02 of its total potential returns per unit of risk. Smurfit WestRock plc is currently generating about 0.0 per unit of volatility. If you would invest  5,350  in Smurfit WestRock plc on November 23, 2024 and sell it today you would lose (34.00) from holding Smurfit WestRock plc or give up 0.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Chart Industries  vs.  Smurfit WestRock plc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510152025
JavaScript chart by amCharts 3.21.15GTLS-PB SW
       Timeline  
Chart Industries 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Chart Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Chart Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6668707274767880
Smurfit WestRock plc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Smurfit WestRock plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Smurfit WestRock is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4950515253545556

Chart Industries and Smurfit WestRock Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.23-5.42-3.6-1.790.01.833.75.567.42 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15GTLS-PB SW
       Returns  

Pair Trading with Chart Industries and Smurfit WestRock

The main advantage of trading using opposite Chart Industries and Smurfit WestRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chart Industries position performs unexpectedly, Smurfit WestRock 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 Smurfit WestRock will offset losses from the drop in Smurfit WestRock's long position.
The idea behind Chart Industries and Smurfit WestRock plc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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