Correlation Between Avient Corp and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Citizens Financial 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 Citizens Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Citizens Financial Group,, you can compare the effects of market volatilities on Avient Corp and Citizens Financial 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Citizens Financial.
Diversification Opportunities for Avient Corp and Citizens Financial
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avient and Citizens is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Avient Corp i.e., Avient Corp and Citizens Financial go up and down completely randomly.
Pair Corralation between Avient Corp and Citizens Financial
Given the investment horizon of 90 days Avient Corp is expected to generate 1.31 times less return on investment than Citizens Financial. In addition to that, Avient Corp is 3.44 times more volatile than Citizens Financial Group,. It trades about 0.02 of its total potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.09 per unit of volatility. If you would invest 2,412 in Citizens Financial Group, on December 4, 2024 and sell it today you would earn a total of 234.00 from holding Citizens Financial Group, or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 40.08% |
| Values | Daily Returns |
Avient Corp vs. Citizens Financial Group,
Performance |
| Timeline |
| Avient Corp |
| Citizens Financial Group, |
Avient Corp and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Citizens Financial
The main advantage of trading using opposite Avient Corp and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Citizens Financial 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 Citizens Financial will offset losses from the drop in Citizens Financial's long position.| Avient Corp vs. Axalta Coating Systems | ||
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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