Correlation Between Axalta Coating and Mega Matrix

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

Diversification Opportunities for Axalta Coating and Mega Matrix

0.66

Correlation Coefficient

Axalta Coating  Mega Matrix

Poor diversification

The 3 months correlation between Axalta and Mega is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and Mega Matrix Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Matrix Corp 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 Mega Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Matrix Corp has no effect on the direction of Axalta Coating i.e., Axalta Coating and Mega Matrix go up and down completely randomly.

Pair Corralation between Axalta Coating and Mega Matrix

Given the investment horizon of 90 days Axalta Coating is expected to generate 2.35 times less return on investment than Mega Matrix. But when comparing it to its historical volatility, Axalta Coating Systems is 3.87 times less risky than Mega Matrix. It trades about 0.04 of its potential returns per unit of risk. Mega Matrix Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Mega Matrix Corp on October 11, 2024 and sell it today you would lose (40.00) from holding Mega Matrix Corp or give up 24.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Axalta Coating Systems  vs.  Mega Matrix Corp

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 latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mega Matrix Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mega Matrix Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mega Matrix is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Axalta Coating and Mega Matrix

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

The idea behind Axalta Coating Systems and Mega Matrix Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.