Correlation Between Air Transport and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Air Transport and Axalta Coating 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 Air Transport and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Axalta Coating Systems, you can compare the effects of market volatilities on Air Transport and Axalta Coating 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 Air Transport with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Axalta Coating.
Diversification Opportunities for Air Transport and Axalta Coating
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Axalta is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems and Air Transport 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 Air Transport Services are associated (or correlated) with Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Air Transport i.e., Air Transport and Axalta Coating go up and down completely randomly.
Pair Corralation between Air Transport and Axalta Coating
Given the investment horizon of 90 days Air Transport Services is expected to generate 2.62 times more return on investment than Axalta Coating. However, Air Transport is 2.62 times more volatile than Axalta Coating Systems. It trades about 0.23 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.33 per unit of risk. If you would invest 1,720 in Air Transport Services on August 27, 2024 and sell it today you would earn a total of 476.00 from holding Air Transport Services or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Axalta Coating Systems
Performance |
| Timeline |
| Air Transport Services |
| Axalta Coating Systems |
Air Transport and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Axalta Coating
The main advantage of trading using opposite Air Transport and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.| Air Transport vs. Copa Holdings SA | Air Transport vs. SkyWest | Air Transport vs. Sun Country Airlines | Air Transport vs. Frontier Group Holdings |
| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |