Correlation Between Axalta Coating and Core Molding
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Core Molding 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 Core Molding 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 Core Molding Technologies, you can compare the effects of market volatilities on Axalta Coating and Core Molding 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 Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Core Molding.
Diversification Opportunities for Axalta Coating and Core Molding
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Axalta and Core is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies 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 Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Axalta Coating i.e., Axalta Coating and Core Molding go up and down completely randomly.
Pair Corralation between Axalta Coating and Core Molding
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.52 times more return on investment than Core Molding. However, Axalta Coating Systems is 1.92 times less risky than Core Molding. It trades about 0.04 of its potential returns per unit of risk. Core Molding Technologies is currently generating about 0.01 per unit of risk. If you would invest 2,927 in Axalta Coating Systems on November 2, 2024 and sell it today you would earn a total of 760.00 from holding Axalta Coating Systems or generate 25.97% 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. Core Molding Technologies
Performance |
| Timeline |
| Axalta Coating Systems |
| Core Molding Technologies |
Axalta Coating and Core Molding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Core Molding
The main advantage of trading using opposite Axalta Coating and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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