Correlation Between DIH Holdings and Axalta Coating

Can any of the company-specific risk be diversified away by investing in both DIH 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 DIH 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 DIH Holdings US, and Axalta Coating Systems, you can compare the effects of market volatilities on DIH 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 DIH Holdings with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIH Holdings and Axalta Coating.

Diversification Opportunities for DIH Holdings and Axalta Coating

-0.04

Correlation Coefficient

DIH Holdings  Axalta Coating

Good diversification

The 3 months correlation between DIH and Axalta is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding DIH Holdings US, 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 DIH 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 DIH Holdings US, 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 DIH Holdings i.e., DIH Holdings and Axalta Coating go up and down completely randomly.

Pair Corralation between DIH Holdings and Axalta Coating

Given the investment horizon of 90 days DIH Holdings US, is expected to under-perform the Axalta Coating. In addition to that, DIH Holdings is 5.45 times more volatile than Axalta Coating Systems. It trades about -0.01 of its total potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.02 per unit of volatility. If you would invest  3,354  in Axalta Coating Systems on December 5, 2024 and sell it today you would earn a total of  118.00  from holding Axalta Coating Systems or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

DIH Holdings US,  vs.  Axalta Coating Systems

DIH Holdings US,

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with DIH Holdings and Axalta Coating

The main advantage of trading using opposite DIH Holdings and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIH 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 DIH Holdings US, 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.