Correlation Between ANT and Avantor
Can any of the company-specific risk be diversified away by investing in both ANT and Avantor 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 ANT and Avantor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Avantor, you can compare the effects of market volatilities on ANT and Avantor 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 ANT with a short position of Avantor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Avantor.
Diversification Opportunities for ANT and Avantor
Very weak diversification
The 3 months correlation between ANT and Avantor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Avantor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantor and ANT 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 ANT are associated (or correlated) with Avantor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantor has no effect on the direction of ANT i.e., ANT and Avantor go up and down completely randomly.
Pair Corralation between ANT and Avantor
Assuming the 90 days trading horizon ANT is expected to generate 11.89 times more return on investment than Avantor. However, ANT is 11.89 times more volatile than Avantor. It trades about 0.1 of its potential returns per unit of risk. Avantor is currently generating about 0.19 per unit of risk. If you would invest 130.00 in ANT on October 20, 2024 and sell it today you would earn a total of 17.00 from holding ANT or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.18% |
| Values | Daily Returns |
ANT vs. Avantor
Performance |
| Timeline |
| ANT |
| Avantor |
ANT and Avantor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Avantor
The main advantage of trading using opposite ANT and Avantor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Avantor 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 Avantor will offset losses from the drop in Avantor's long position.The idea behind ANT and Avantor 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.| Avantor vs. Ashland Global Holdings | Avantor vs. H B Fuller | Avantor vs. Element Solutions | Avantor vs. Balchem |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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