Correlation Between Axalta Coating and ROC Energy
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and ROC Energy 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 ROC Energy 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 ROC Energy Acquisition, you can compare the effects of market volatilities on Axalta Coating and ROC Energy 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 ROC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and ROC Energy.
Diversification Opportunities for Axalta Coating and ROC Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axalta and ROC is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and ROC Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROC Energy Acquisition 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 ROC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROC Energy Acquisition has no effect on the direction of Axalta Coating i.e., Axalta Coating and ROC Energy go up and down completely randomly.
Pair Corralation between Axalta Coating and ROC Energy
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.15 times more return on investment than ROC Energy. However, Axalta Coating Systems is 6.71 times less risky than ROC Energy. It trades about 0.05 of its potential returns per unit of risk. ROC Energy Acquisition is currently generating about -0.05 per unit of risk. If you would invest 3,189 in Axalta Coating Systems on September 2, 2024 and sell it today you would earn a total of 857.00 from holding Axalta Coating Systems or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.88% |
| Values | Daily Returns |
Axalta Coating Systems vs. ROC Energy Acquisition
Performance |
| Timeline |
| Axalta Coating Systems |
| ROC Energy Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Axalta Coating and ROC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and ROC Energy
The main advantage of trading using opposite Axalta Coating and ROC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, ROC Energy 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 ROC Energy will offset losses from the drop in ROC Energy's long position.| Axalta Coating vs. Linde plc Ordinary | Axalta Coating vs. Air Products and | Axalta Coating vs. Aquagold International | Axalta Coating vs. Thrivent High Yield |
| ROC Energy vs. Canlan Ice Sports | ROC Energy vs. Summa Silver Corp | ROC Energy vs. Harmony Gold Mining | ROC Energy vs. Vindicator Silver Lead Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |