Correlation Between Axalta Coating and Fortress Transp
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Fortress Transp 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 Fortress Transp 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 Fortress Transp Infra, you can compare the effects of market volatilities on Axalta Coating and Fortress Transp 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 Fortress Transp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Fortress Transp.
Diversification Opportunities for Axalta Coating and Fortress Transp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axalta and Fortress is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Fortress Transp Infra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Transp Infra 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 Fortress Transp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Transp Infra has no effect on the direction of Axalta Coating i.e., Axalta Coating and Fortress Transp go up and down completely randomly.
Pair Corralation between Axalta Coating and Fortress Transp
Given the investment horizon of 90 days Axalta Coating is expected to generate 1.18 times less return on investment than Fortress Transp. But when comparing it to its historical volatility, Axalta Coating Systems is 1.6 times less risky than Fortress Transp. It trades about 0.32 of its potential returns per unit of risk. Fortress Transp Infra is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 14,224 in Fortress Transp Infra on August 28, 2024 and sell it today you would earn a total of 2,602 from holding Fortress Transp Infra or generate 18.29% 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. Fortress Transp Infra
Performance |
| Timeline |
| Axalta Coating Systems |
| Fortress Transp Infra |
Axalta Coating and Fortress Transp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Fortress Transp
The main advantage of trading using opposite Axalta Coating and Fortress Transp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Fortress Transp 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 Fortress Transp will offset losses from the drop in Fortress Transp's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Fortress Transp vs. PROG Holdings | Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Mega Matrix Corp | Fortress Transp vs. FTAI Aviation Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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