Correlation Between Axalta Coating and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Inflection Point 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 Inflection Point 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 Inflection Point Acquisition, you can compare the effects of market volatilities on Axalta Coating and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Inflection Point.
Diversification Opportunities for Axalta Coating and Inflection Point
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axalta and Inflection is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Axalta Coating i.e., Axalta Coating and Inflection Point go up and down completely randomly.
Pair Corralation between Axalta Coating and Inflection Point
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 6.01 times more return on investment than Inflection Point. However, Axalta Coating is 6.01 times more volatile than Inflection Point Acquisition. It trades about 0.07 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.11 per unit of risk. If you would invest 3,548 in Axalta Coating Systems on September 3, 2024 and sell it today you would earn a total of 498.00 from holding Axalta Coating Systems or generate 14.04% 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. Inflection Point Acquisition
Performance |
| Timeline |
| Axalta Coating Systems |
| Inflection Point Acq |
Axalta Coating and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Inflection Point
The main advantage of trading using opposite Axalta Coating and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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