Correlation Between Axalta Coating and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Ambev SA 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 Axalta Coating and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axalta Coating Systems and Ambev SA ADR, you can compare the effects of market volatilities on Axalta Coating and Ambev SA 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 Axalta Coating with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Ambev SA.
Diversification Opportunities for Axalta Coating and Ambev SA
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axalta and Ambev is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR and Axalta Coating 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 Axalta Coating Systems are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA ADR has no effect on the direction of Axalta Coating i.e., Axalta Coating and Ambev SA go up and down completely randomly.
Pair Corralation between Axalta Coating and Ambev SA
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.0 times more return on investment than Ambev SA. However, Axalta Coating is 1.0 times more volatile than Ambev SA ADR. It trades about 0.06 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.06 per unit of risk. If you would invest 3,262 in Axalta Coating Systems on September 2, 2024 and sell it today you would earn a total of 784.00 from holding Axalta Coating Systems or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Ambev SA ADR
Performance |
| Timeline |
| Axalta Coating Systems |
| Ambev SA ADR |
Axalta Coating and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Ambev SA
The main advantage of trading using opposite Axalta Coating and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| Axalta Coating vs. Linde plc Ordinary | Axalta Coating vs. Air Products and | Axalta Coating vs. Aquagold International | Axalta Coating vs. Thrivent High Yield |
| Ambev SA vs. Compania Cervecerias Unidas | Ambev SA vs. Molson Coors Brewing | Ambev SA vs. Suntory Beverage Food | Ambev SA vs. Carlsberg AS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |