Correlation Between Chart Industries and Smith AO

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

By analyzing existing cross correlation between Chart Industries and Smith AO, you can compare the effects of market volatilities on Chart Industries and Smith AO 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 Smith AO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chart Industries and Smith AO.

Diversification Opportunities for Chart Industries and Smith AO

0.55

Correlation Coefficient

Chart Industries  Smith AO

Very weak diversification

The 3 months correlation between Chart and Smith is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chart Industries and Smith AO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith AO 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 Smith AO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith AO has no effect on the direction of Chart Industries i.e., Chart Industries and Smith AO go up and down completely randomly.

Pair Corralation between Chart Industries and Smith AO

Given the investment horizon of 90 days Chart Industries is expected to generate 1.39 times more return on investment than Smith AO. However, Chart Industries is 1.39 times more volatile than Smith AO. It trades about 0.15 of its potential returns per unit of risk. Smith AO is currently generating about 0.0 per unit of risk. If you would invest  16,639  in Chart Industries on July 13, 2025 and sell it today you would earn a total of  3,342  from holding Chart Industries or generate 20.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Chart Industries  vs.  Smith AO

Chart Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chart Industries are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Chart Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Smith AO

Risk-Adjusted Performance

Weakest

Over the last 90 days Smith AO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Smith AO is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chart Industries and Smith AO

The main advantage of trading using opposite Chart Industries and Smith AO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chart Industries position performs unexpectedly, Smith AO 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 Smith AO will offset losses from the drop in Smith AO's long position.

The idea behind Chart Industries and Smith AO 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.