Correlation Between Visa and Chart Industries

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

Diversification Opportunities for Visa and Chart Industries

VisaChartDiversified AwayVisaChartDiversified Away100%
0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Visa and Chart is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Chart Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chart Industries and Visa 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 Visa Class A 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 Visa i.e., Visa and Chart Industries go up and down completely randomly.

Pair Corralation between Visa and Chart Industries

Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.31 times more return on investment than Chart Industries. However, Visa Class A is 3.18 times less risky than Chart Industries. It trades about 0.48 of its potential returns per unit of risk. Chart Industries is currently generating about -0.27 per unit of risk. If you would invest  32,302  in Visa Class A on November 23, 2024 and sell it today you would earn a total of  2,888  from holding Visa Class A or generate 8.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Visa Class A  vs.  Chart Industries

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0510152025
JavaScript chart by amCharts 3.21.15V GTLS
       Timeline  
Visa Class A 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb310320330340350
Chart Industries 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Over the last 90 days Chart Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Chart Industries is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb170180190200210220

Visa and Chart Industries Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.71-2.03-1.35-0.670.01130.761.522.283.04 0.10.20.30.4
JavaScript chart by amCharts 3.21.15V GTLS
       Returns  

Pair Trading with Visa and Chart Industries

The main advantage of trading using opposite Visa and Chart Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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 Visa Class A 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.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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