Correlation Between Axalta Coating and WELLS
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By analyzing existing cross correlation between Axalta Coating Systems and WELLS FARGO NEW, you can compare the effects of market volatilities on Axalta Coating and WELLS 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 WELLS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and WELLS.
Diversification Opportunities for Axalta Coating and WELLS
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axalta and WELLS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and WELLS FARGO NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELLS FARGO NEW 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 WELLS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELLS FARGO NEW has no effect on the direction of Axalta Coating i.e., Axalta Coating and WELLS go up and down completely randomly.
Pair Corralation between Axalta Coating and WELLS
Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 1.02 times more return on investment than WELLS. However, Axalta Coating is 1.02 times more volatile than WELLS FARGO NEW. It trades about 0.23 of its potential returns per unit of risk. WELLS FARGO NEW is currently generating about 0.14 per unit of risk. If you would invest 3,792 in Axalta Coating Systems on September 1, 2024 and sell it today you would earn a total of 254.00 from holding Axalta Coating Systems or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. WELLS FARGO NEW
Performance |
| Timeline |
| Axalta Coating Systems |
| WELLS FARGO NEW |
Axalta Coating and WELLS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and WELLS
The main advantage of trading using opposite Axalta Coating and WELLS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, WELLS 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 WELLS will offset losses from the drop in WELLS'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 |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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