Correlation Between Axalta Coating and Olin
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Olin 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 Olin 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 Olin Corporation, you can compare the effects of market volatilities on Axalta Coating and Olin 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 Olin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Olin.
Diversification Opportunities for Axalta Coating and Olin
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Axalta and Olin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Olin Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olin 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 Olin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olin has no effect on the direction of Axalta Coating i.e., Axalta Coating and Olin go up and down completely randomly.
Pair Corralation between Axalta Coating and Olin
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.19 times more return on investment than Olin. However, Axalta Coating is 1.19 times more volatile than Olin Corporation. It trades about 0.33 of its potential returns per unit of risk. Olin Corporation is currently generating about 0.13 per unit of risk. If you would invest 3,559 in Axalta Coating Systems on August 28, 2024 and sell it today you would earn a total of 570.00 from holding Axalta Coating Systems or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Olin Corp.
Performance |
| Timeline |
| Axalta Coating Systems |
| Olin |
Axalta Coating and Olin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Olin
The main advantage of trading using opposite Axalta Coating and Olin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Olin 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 Olin will offset losses from the drop in Olin's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |