Correlation Between Axalta Coating and Balchem
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Balchem 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 Balchem 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 Balchem, you can compare the effects of market volatilities on Axalta Coating and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Balchem.
Diversification Opportunities for Axalta Coating and Balchem
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axalta and Balchem is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Axalta Coating i.e., Axalta Coating and Balchem go up and down completely randomly.
Pair Corralation between Axalta Coating and Balchem
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.34 times more return on investment than Balchem. However, Axalta Coating is 1.34 times more volatile than Balchem. It trades about 0.29 of its potential returns per unit of risk. Balchem is currently generating about 0.2 per unit of risk. If you would invest 3,559 in Axalta Coating Systems on August 27, 2024 and sell it today you would earn a total of 493.00 from holding Axalta Coating Systems or generate 13.85% 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. Balchem
Performance |
| Timeline |
| Axalta Coating Systems |
| Balchem |
Axalta Coating and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Balchem
The main advantage of trading using opposite Axalta Coating and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |