Correlation Between Pinterest and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Pinterest 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 Pinterest and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinterest and Axalta Coating Systems, you can compare the effects of market volatilities on Pinterest 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 Pinterest with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinterest and Axalta Coating.
Diversification Opportunities for Pinterest and Axalta Coating
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pinterest and Axalta is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest 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 Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Axalta Coating go up and down completely randomly.
Pair Corralation between Pinterest and Axalta Coating
Given the investment horizon of 90 days Pinterest is expected to under-perform the Axalta Coating. In addition to that, Pinterest is 1.7 times more volatile than Axalta Coating Systems. It trades about -0.05 of its total potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.33 per unit of volatility. If you would invest 3,559 in Axalta Coating Systems on August 27, 2024 and sell it today you would earn a total of 570.00 from holding Axalta Coating Systems or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinterest vs. Axalta Coating Systems
Performance |
| Timeline |
| Axalta Coating Systems |
Pinterest and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinterest and Axalta Coating
The main advantage of trading using opposite Pinterest and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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.| Pinterest vs. Alphabet Inc Class C | Pinterest vs. Twilio Inc | Pinterest vs. Snap Inc | Pinterest vs. Baidu Inc |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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