Correlation Between Inflection Point and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Inflection Point and Axalta Coating 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 Inflection Point and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Axalta Coating Systems, you can compare the effects of market volatilities on Inflection Point and Axalta Coating 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 Inflection Point with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Axalta Coating.
Diversification Opportunities for Inflection Point and Axalta Coating
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inflection and Axalta is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Axalta Coating Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axalta Coating Systems and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Axalta Coating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axalta Coating Systems has no effect on the direction of Inflection Point i.e., Inflection Point and Axalta Coating go up and down completely randomly.
Pair Corralation between Inflection Point and Axalta Coating
Assuming the 90 days horizon Inflection Point is expected to generate 3.53 times less return on investment than Axalta Coating. But when comparing it to its historical volatility, Inflection Point Acquisition is 6.01 times less risky than Axalta Coating. It trades about 0.11 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,548 in Axalta Coating Systems on September 3, 2024 and sell it today you would earn a total of 498.00 from holding Axalta Coating Systems or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Axalta Coating Systems
Performance |
| Timeline |
| Inflection Point Acq |
| Axalta Coating Systems |
Inflection Point and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Axalta Coating
The main advantage of trading using opposite Inflection Point and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, Axalta Coating 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 Axalta Coating will offset losses from the drop in Axalta Coating's long position.| Inflection Point vs. Arrow Electronics | Inflection Point vs. BioNTech SE | Inflection Point vs. BJs Restaurants | Inflection Point vs. Yum Brands |
| Axalta Coating vs. Avient Corp | Axalta Coating vs. H B Fuller | Axalta Coating vs. Quaker Chemical | Axalta Coating vs. Cabot |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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