Correlation Between Axalta Coating and ZJK Industrial
Can any of the company-specific risk be diversified away by investing in both Axalta Coating and ZJK Industrial 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 ZJK Industrial 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 ZJK Industrial Co,, you can compare the effects of market volatilities on Axalta Coating and ZJK Industrial 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 ZJK Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and ZJK Industrial.
Diversification Opportunities for Axalta Coating and ZJK Industrial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axalta and ZJK is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and ZJK Industrial Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZJK Industrial Co, 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 ZJK Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZJK Industrial Co, has no effect on the direction of Axalta Coating i.e., Axalta Coating and ZJK Industrial go up and down completely randomly.
Pair Corralation between Axalta Coating and ZJK Industrial
Given the investment horizon of 90 days Axalta Coating is expected to generate 14.92 times less return on investment than ZJK Industrial. But when comparing it to its historical volatility, Axalta Coating Systems is 6.28 times less risky than ZJK Industrial. It trades about 0.05 of its potential returns per unit of risk. ZJK Industrial Co, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 500.00 in ZJK Industrial Co, on August 31, 2024 and sell it today you would earn a total of 178.00 from holding ZJK Industrial Co, or generate 35.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 11.76% |
| Values | Daily Returns |
Axalta Coating Systems vs. ZJK Industrial Co,
Performance |
| Timeline |
| Axalta Coating Systems |
| ZJK Industrial Co, |
Axalta Coating and ZJK Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and ZJK Industrial
The main advantage of trading using opposite Axalta Coating and ZJK Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, ZJK Industrial 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 ZJK Industrial will offset losses from the drop in ZJK Industrial's long position.| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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