Correlation Between Axalta Coating and Canada Goose
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Canada Goose 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 Canada Goose 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 Canada Goose Holdings, you can compare the effects of market volatilities on Axalta Coating and Canada Goose 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 Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Canada Goose.
Diversification Opportunities for Axalta Coating and Canada Goose
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axalta and Canada is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings 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 Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of Axalta Coating i.e., Axalta Coating and Canada Goose go up and down completely randomly.
Pair Corralation between Axalta Coating and Canada Goose
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.78 times more return on investment than Canada Goose. However, Axalta Coating Systems is 1.29 times less risky than Canada Goose. It trades about 0.24 of its potential returns per unit of risk. Canada Goose Holdings is currently generating about 0.03 per unit of risk. If you would invest 3,440 in Axalta Coating Systems on October 21, 2024 and sell it today you would earn a total of 188.00 from holding Axalta Coating Systems or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Canada Goose Holdings
Performance |
| Timeline |
| Axalta Coating Systems |
| Canada Goose Holdings |
Axalta Coating and Canada Goose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Canada Goose
The main advantage of trading using opposite Axalta Coating and Canada Goose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Canada Goose 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 Canada Goose will offset losses from the drop in Canada Goose's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Canada Goose vs. PVH Corp | Canada Goose vs. VF Corporation | Canada Goose vs. Levi Strauss Co | Canada Goose vs. Under Armour A |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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