Correlation Between Axalta Coating and Albertsons Companies
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Albertsons Companies 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 Albertsons Companies 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 Albertsons Companies, you can compare the effects of market volatilities on Axalta Coating and Albertsons Companies 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 Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Albertsons Companies.
Diversification Opportunities for Axalta Coating and Albertsons Companies
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axalta and Albertsons is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies 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 Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of Axalta Coating i.e., Axalta Coating and Albertsons Companies go up and down completely randomly.
Pair Corralation between Axalta Coating and Albertsons Companies
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.64 times more return on investment than Albertsons Companies. However, Axalta Coating is 1.64 times more volatile than Albertsons Companies. It trades about 0.05 of its potential returns per unit of risk. Albertsons Companies is currently generating about 0.0 per unit of risk. If you would invest 3,167 in Axalta Coating Systems on August 31, 2024 and sell it today you would earn a total of 879.00 from holding Axalta Coating Systems or generate 27.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Albertsons Companies
Performance |
| Timeline |
| Axalta Coating Systems |
| Albertsons Companies |
Axalta Coating and Albertsons Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Albertsons Companies
The main advantage of trading using opposite Axalta Coating and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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