Correlation Between Axalta Coating and Brenmiller Energy

Can any of the company-specific risk be diversified away by investing in both Axalta Coating and Brenmiller Energy 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 Brenmiller Energy 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 Brenmiller Energy Ltd, you can compare the effects of market volatilities on Axalta Coating and Brenmiller Energy 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 Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Brenmiller Energy.

Diversification Opportunities for Axalta Coating and Brenmiller Energy

-0.4

Correlation Coefficient

Axalta Coating  Brenmiller Energy

Very good diversification

The 3 months correlation between Axalta and Brenmiller is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Axalta Coating i.e., Axalta Coating and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Axalta Coating and Brenmiller Energy

Given the investment horizon of 90 days Axalta Coating Systems is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, Axalta Coating Systems is 3.34 times less risky than Brenmiller Energy. The stock trades about -0.46 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  72.00  in Brenmiller Energy Ltd on September 22, 2024 and sell it today you would earn a total of  3.00  from holding Brenmiller Energy Ltd or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Axalta Coating Systems  vs.  Brenmiller Energy Ltd

Axalta Coating Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axalta Coating Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Axalta Coating is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Axalta Coating and Brenmiller Energy

The main advantage of trading using opposite Axalta Coating and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating position performs unexpectedly, Brenmiller Energy 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 Brenmiller Energy will offset losses from the drop in Brenmiller Energy's long position.

The idea behind Axalta Coating Systems and Brenmiller Energy Ltd 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.