Correlation Between Axalta Coating and Allient
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Allient 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 Allient 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 Allient, you can compare the effects of market volatilities on Axalta Coating and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Allient.
Diversification Opportunities for Axalta Coating and Allient
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axalta and Allient is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Axalta Coating i.e., Axalta Coating and Allient go up and down completely randomly.
Pair Corralation between Axalta Coating and Allient
Given the investment horizon of 90 days Axalta Coating is expected to generate 2.52 times less return on investment than Allient. But when comparing it to its historical volatility, Axalta Coating Systems is 1.29 times less risky than Allient. It trades about 0.29 of its potential returns per unit of risk. Allient is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Allient on August 29, 2024 and sell it today you would earn a total of 729.00 from holding Allient or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Allient
Performance |
| Timeline |
| Axalta Coating Systems |
| Allient |
Axalta Coating and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Allient
The main advantage of trading using opposite Axalta Coating and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Allient vs. Summa Silver Corp | Allient vs. Paysafe | Allient vs. Red Branch Technologies | Allient vs. Arrow Electronics |
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 CEOs Directory module to screen CEOs from public companies around the world.
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