Correlation Between Chart Industries and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both Chart Industries and Abcellera Biologics 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 Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chart Industries and Abcellera Biologics, you can compare the effects of market volatilities on Chart Industries and Abcellera Biologics 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 Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Abcellera Biologics.
Diversification Opportunities for Chart Industries and Abcellera Biologics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chart and Abcellera is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics 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 Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Chart Industries i.e., Chart Industries and Abcellera Biologics go up and down completely randomly.
Pair Corralation between Chart Industries and Abcellera Biologics
Given the investment horizon of 90 days Chart Industries is expected to generate 1.0 times more return on investment than Abcellera Biologics. However, Chart Industries is 1.0 times less risky than Abcellera Biologics. It trades about 0.05 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.05 per unit of risk. If you would invest 12,056 in Chart Industries on September 3, 2024 and sell it today you would earn a total of 7,269 from holding Chart Industries or generate 60.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chart Industries vs. Abcellera Biologics
Performance |
| Timeline |
| Chart Industries |
| Abcellera Biologics |
Chart Industries and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chart Industries and Abcellera Biologics
The main advantage of trading using opposite Chart Industries and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chart Industries position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.| Chart Industries vs. Crane NXT Co | Chart Industries vs. Donaldson | Chart Industries vs. ITT Inc | Chart Industries vs. Franklin Electric Co |
| Abcellera Biologics vs. Hepion Pharmaceuticals | Abcellera Biologics vs. Krystal Biotech | Abcellera Biologics vs. CureVac NV | Abcellera Biologics vs. Vir Biotechnology |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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