Correlation Between Axalta Coating and Asure Software
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Asure Software 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 Asure Software 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 Asure Software, you can compare the effects of market volatilities on Axalta Coating and Asure Software 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 Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Asure Software.
Diversification Opportunities for Axalta Coating and Asure Software
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Axalta and Asure is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software 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 Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Axalta Coating i.e., Axalta Coating and Asure Software go up and down completely randomly.
Pair Corralation between Axalta Coating and Asure Software
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.46 times more return on investment than Asure Software. However, Axalta Coating Systems is 2.16 times less risky than Asure Software. It trades about 0.29 of its potential returns per unit of risk. Asure Software is currently generating about 0.03 per unit of risk. If you would invest 3,559 in Axalta Coating Systems on August 29, 2024 and sell it today you would earn a total of 508.00 from holding Axalta Coating Systems or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Asure Software
Performance |
| Timeline |
| Axalta Coating Systems |
| Asure Software |
Axalta Coating and Asure Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Asure Software
The main advantage of trading using opposite Axalta Coating and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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