Correlation Between Cadeler AS and Axalta Coating

Can any of the company-specific risk be diversified away by investing in both Cadeler AS 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 Cadeler AS and Axalta Coating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cadeler AS and Axalta Coating Systems, you can compare the effects of market volatilities on Cadeler AS 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 Cadeler AS with a short position of Axalta Coating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler AS and Axalta Coating.

Diversification Opportunities for Cadeler AS and Axalta Coating

-0.15

Correlation Coefficient

Cadeler AS  Axalta Coating

Good diversification

The 3 months correlation between Cadeler and Axalta is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler AS 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 Cadeler AS 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 Cadeler AS 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 Cadeler AS i.e., Cadeler AS and Axalta Coating go up and down completely randomly.

Pair Corralation between Cadeler AS and Axalta Coating

Given the investment horizon of 90 days Cadeler AS is expected to under-perform the Axalta Coating. In addition to that, Cadeler AS is 1.13 times more volatile than Axalta Coating Systems. It trades about -0.23 of its total potential returns per unit of risk. Axalta Coating Systems is currently generating about 0.22 per unit of volatility. If you would invest  3,677  in Axalta Coating Systems on August 16, 2024 and sell it today you would earn a total of  383.00  from holding Axalta Coating Systems or generate 10.42% return on investment over 90 days.

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

Cadeler AS  vs.  Axalta Coating Systems

Cadeler AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cadeler AS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Axalta Coating Systems

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Axalta Coating Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Axalta Coating sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cadeler AS and Axalta Coating

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

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.