Correlation Between Axalta Coating and Ecovyst
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Ecovyst 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 Ecovyst 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 Ecovyst, you can compare the effects of market volatilities on Axalta Coating and Ecovyst 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 Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Ecovyst.
Diversification Opportunities for Axalta Coating and Ecovyst
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axalta and Ecovyst is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst 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 Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Axalta Coating i.e., Axalta Coating and Ecovyst go up and down completely randomly.
Pair Corralation between Axalta Coating and Ecovyst
Given the investment horizon of 90 days Axalta Coating is expected to generate 1.71 times less return on investment than Ecovyst. But when comparing it to its historical volatility, Axalta Coating Systems is 1.63 times less risky than Ecovyst. It trades about 0.33 of its potential returns per unit of risk. Ecovyst is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 634.00 in Ecovyst on August 28, 2024 and sell it today you would earn a total of 180.00 from holding Ecovyst or generate 28.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Ecovyst
Performance |
| Timeline |
| Axalta Coating Systems |
| Ecovyst |
Axalta Coating and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Ecovyst
The main advantage of trading using opposite Axalta Coating and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Ecovyst 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 Ecovyst will offset losses from the drop in Ecovyst's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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