Correlation Between Axalta Coating and PTWOW Old

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

Diversification Opportunities for Axalta Coating and PTWOW Old

0.0

Correlation Coefficient

Axalta Coating  PTWOW Old

Pay attention - limited upside

The 3 months correlation between Axalta and PTWOW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems and PTWOW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTWOW Old 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 PTWOW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTWOW Old has no effect on the direction of Axalta Coating i.e., Axalta Coating and PTWOW Old go up and down completely randomly.

Pair Corralation between Axalta Coating and PTWOW Old

If you would invest  3,435  in Axalta Coating Systems on December 21, 2024 and sell it today you would lose (30.00) from holding Axalta Coating Systems or give up 0.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Axalta Coating Systems  vs.  PTWOW Old

Axalta Coating Systems

Risk-Adjusted Performance

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.

PTWOW Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PTWOW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PTWOW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Axalta Coating and PTWOW Old

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

The idea behind Axalta Coating Systems and PTWOW Old 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.