Correlation Between Q2 Holdings and Axalta Coating
Can any of the company-specific risk be diversified away by investing in both Q2 Holdings 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 Q2 Holdings and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Q2 Holdings and Axalta Coating Systems, you can compare the effects of market volatilities on Q2 Holdings 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 Q2 Holdings with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Holdings and Axalta Coating.
Diversification Opportunities for Q2 Holdings and Axalta Coating
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QTWO and Axalta is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings i.e., Q2 Holdings and Axalta Coating go up and down completely randomly.
Pair Corralation between Q2 Holdings and Axalta Coating
Given the investment horizon of 90 days Q2 Holdings is expected to generate 1.67 times more return on investment than Axalta Coating. However, Q2 Holdings is 1.67 times more volatile than Axalta Coating Systems. It trades about 0.19 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.07 per unit of risk. If you would invest 3,552 in Q2 Holdings on August 26, 2024 and sell it today you would earn a total of 7,085 from holding Q2 Holdings or generate 199.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Q2 Holdings vs. Axalta Coating Systems
Performance |
| Timeline |
| Q2 Holdings |
| Axalta Coating Systems |
Q2 Holdings and Axalta Coating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2 Holdings and Axalta Coating
The main advantage of trading using opposite Q2 Holdings and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Holdings 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.The idea behind Q2 Holdings and Axalta Coating Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |