Correlation Between Topbuild Corp and Chart Industries

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

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

Diversification Opportunities for Topbuild Corp and Chart Industries

0.73

Correlation Coefficient

Topbuild Corp  Chart Industries

Poor diversification

The 3 months correlation between Topbuild and Chart is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Topbuild Corp and Chart Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chart Industries and Topbuild Corp 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 Topbuild Corp 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 Topbuild Corp i.e., Topbuild Corp and Chart Industries go up and down completely randomly.

Pair Corralation between Topbuild Corp and Chart Industries

Considering the 90-day investment horizon Topbuild Corp is expected to generate 0.98 times more return on investment than Chart Industries. However, Topbuild Corp is 1.02 times less risky than Chart Industries. It trades about 0.2 of its potential returns per unit of risk. Chart Industries is currently generating about 0.09 per unit of risk. If you would invest  31,210  in Topbuild Corp on May 12, 2025 and sell it today you would earn a total of  10,331  from holding Topbuild Corp or generate 33.1% return on investment over 90 days.

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

Topbuild Corp  vs.  Chart Industries

Topbuild Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Topbuild Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Topbuild Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Chart Industries

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Chart Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Chart Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Topbuild Corp and Chart Industries

The main advantage of trading using opposite Topbuild Corp and Chart Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Topbuild Corp 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 Topbuild Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.