Correlation Between Core Molding and Axalta Coating

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

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

Diversification Opportunities for Core Molding and Axalta Coating

-0.71

Correlation Coefficient

Core Molding  Axalta Coating

Pay attention - limited upside

The 3 months correlation between Core and Axalta is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Core Molding Technologies 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 Core Molding 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 Core Molding Technologies 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 Core Molding i.e., Core Molding and Axalta Coating go up and down completely randomly.

Pair Corralation between Core Molding and Axalta Coating

Considering the 90-day investment horizon Core Molding Technologies is expected to generate 1.08 times more return on investment than Axalta Coating. However, Core Molding is 1.08 times more volatile than Axalta Coating Systems. It trades about 0.07 of its potential returns per unit of risk. Axalta Coating Systems is currently generating about -0.13 per unit of risk. If you would invest  1,557  in Core Molding Technologies on May 2, 2025 and sell it today you would earn a total of  107.00  from holding Core Molding Technologies or generate 6.87% return on investment over 90 days.

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

Core Molding Technologies  vs.  Axalta Coating Systems

Core Molding Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Core Molding Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Core Molding may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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

Pair Trading with Core Molding and Axalta Coating

The main advantage of trading using opposite Core Molding and Axalta Coating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Molding 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 Core Molding Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.