Correlation Between Axalta Coating and PACS Group,

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

Diversification Opportunities for Axalta Coating and PACS Group,

-0.23

Correlation Coefficient

Axalta Coating  PACS Group,

Very good diversification

The 3 months correlation between Axalta and PACS is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and PACS Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACS Group, 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 PACS Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACS Group, has no effect on the direction of Axalta Coating i.e., Axalta Coating and PACS Group, go up and down completely randomly.

Pair Corralation between Axalta Coating and PACS Group,

Given the investment horizon of 90 days Axalta Coating Systems is expected to generate 0.54 times more return on investment than PACS Group,. However, Axalta Coating Systems is 1.85 times less risky than PACS Group,. It trades about -0.49 of its potential returns per unit of risk. PACS Group, is currently generating about -0.28 per unit of risk. If you would invest  3,984  in Axalta Coating Systems on October 10, 2024 and sell it today you would lose (554.00) from holding Axalta Coating Systems or give up 13.91% of portfolio value over 90 days.

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

Axalta Coating Systems  vs.  PACS Group,

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.

PACS Group,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACS Group, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Axalta Coating and PACS Group,

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

The idea behind Axalta Coating Systems and PACS Group, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.