Correlation Between Avient Corp and Allegiant Travel
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Allegiant Travel 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 Avient Corp and Allegiant Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Allegiant Travel, you can compare the effects of market volatilities on Avient Corp and Allegiant Travel 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 Avient Corp with a short position of Allegiant Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Allegiant Travel.
Diversification Opportunities for Avient Corp and Allegiant Travel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avient and Allegiant is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Allegiant Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Travel and Avient Corp 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 Avient Corp are associated (or correlated) with Allegiant Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Travel has no effect on the direction of Avient Corp i.e., Avient Corp and Allegiant Travel go up and down completely randomly.
Pair Corralation between Avient Corp and Allegiant Travel
Given the investment horizon of 90 days Avient Corp is expected to generate 0.59 times more return on investment than Allegiant Travel. However, Avient Corp is 1.69 times less risky than Allegiant Travel. It trades about 0.06 of its potential returns per unit of risk. Allegiant Travel is currently generating about 0.01 per unit of risk. If you would invest 3,559 in Avient Corp on September 12, 2024 and sell it today you would earn a total of 1,373 from holding Avient Corp or generate 38.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Allegiant Travel
Performance |
| Timeline |
| Avient Corp |
| Allegiant Travel |
Avient Corp and Allegiant Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Allegiant Travel
The main advantage of trading using opposite Avient Corp and Allegiant Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Allegiant Travel 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 Allegiant Travel will offset losses from the drop in Allegiant Travel's long position.| Avient Corp vs. Griffon | Avient Corp vs. Merck Company | Avient Corp vs. Brinker International | Avient Corp vs. Alcoa Corp |
| Allegiant Travel vs. Volaris | Allegiant Travel vs. flyExclusive, | Allegiant Travel vs. Alaska Air Group | Allegiant Travel vs. Copa Holdings SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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