Correlation Between Axalta Coating and Topaz Resources

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

Diversification Opportunities for Axalta Coating and Topaz Resources

0.0

Correlation Coefficient

Axalta Coating  Topaz Resources

Pay attention - limited upside

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

Pair Corralation between Axalta Coating and Topaz Resources

If you would invest  3,499  in Axalta Coating Systems on September 5, 2024 and sell it today you would earn a total of  560.00  from holding Axalta Coating Systems or generate 16.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Axalta Coating Systems  vs.  Topaz Resources

Axalta Coating Systems

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Axalta Coating Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axalta Coating sustained solid returns over the last few months and may actually be approaching a breakup point.

Topaz Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Topaz Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Topaz Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Axalta Coating and Topaz Resources

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

The idea behind Axalta Coating Systems and Topaz Resources 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.