Correlation Between Axalta Coating and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Boston Beer 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 Boston Beer 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 Boston Beer, you can compare the effects of market volatilities on Axalta Coating and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Boston Beer.
Diversification Opportunities for Axalta Coating and Boston Beer
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axalta and Boston is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Axalta Coating i.e., Axalta Coating and Boston Beer go up and down completely randomly.
Pair Corralation between Axalta Coating and Boston Beer
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.58 times more return on investment than Boston Beer. However, Axalta Coating is 1.58 times more volatile than Boston Beer. It trades about 0.27 of its potential returns per unit of risk. Boston Beer is currently generating about 0.1 per unit of risk. If you would invest 3,559 in Axalta Coating Systems on August 29, 2024 and sell it today you would earn a total of 494.00 from holding Axalta Coating Systems or generate 13.88% 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. Boston Beer
Performance |
| Timeline |
| Axalta Coating Systems |
| Boston Beer |
Axalta Coating and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Boston Beer
The main advantage of trading using opposite Axalta Coating and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Axalta Coating vs. Direxion Daily FTSE | Axalta Coating vs. Collegium Pharmaceutical | Axalta Coating vs. KKR Co LP | Axalta Coating vs. iShares Dividend and |
| Boston Beer vs. Fomento Economico Mexicano | Boston Beer vs. Carlsberg AS | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Molson Coors Brewing |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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