Correlation Between Axalta Coating and Virco Manufacturing
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing, you can compare the effects of market volatilities on Axalta Coating and Virco Manufacturing 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 Virco Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Virco Manufacturing.
Diversification Opportunities for Axalta Coating and Virco Manufacturing
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Axalta and Virco is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Virco Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virco Manufacturing 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 Virco Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virco Manufacturing has no effect on the direction of Axalta Coating i.e., Axalta Coating and Virco Manufacturing go up and down completely randomly.
Pair Corralation between Axalta Coating and Virco Manufacturing
Given the investment horizon of 90 days Axalta Coating is expected to generate 2.57 times less return on investment than Virco Manufacturing. But when comparing it to its historical volatility, Axalta Coating Systems is 2.72 times less risky than Virco Manufacturing. It trades about 0.23 of its potential returns per unit of risk. Virco Manufacturing is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,403 in Virco Manufacturing on September 1, 2024 and sell it today you would earn a total of 239.00 from holding Virco Manufacturing or generate 17.03% 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. Virco Manufacturing
Performance |
| Timeline |
| Axalta Coating Systems |
| Virco Manufacturing |
Axalta Coating and Virco Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Virco Manufacturing
The main advantage of trading using opposite Axalta Coating and Virco Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Virco Manufacturing 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 Virco Manufacturing will offset losses from the drop in Virco Manufacturing'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 |
| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |