Correlation Between Avient Corp and Core Molding
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Core Molding 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 Core Molding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Core Molding Technologies, you can compare the effects of market volatilities on Avient Corp and Core Molding 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 Core Molding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Core Molding.
Diversification Opportunities for Avient Corp and Core Molding
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avient and Core is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Core Molding Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Molding Technologies 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 Core Molding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Molding Technologies has no effect on the direction of Avient Corp i.e., Avient Corp and Core Molding go up and down completely randomly.
Pair Corralation between Avient Corp and Core Molding
Given the investment horizon of 90 days Avient Corp is expected to generate 0.67 times more return on investment than Core Molding. However, Avient Corp is 1.49 times less risky than Core Molding. It trades about 0.06 of its potential returns per unit of risk. Core Molding Technologies is currently generating about 0.01 per unit of risk. If you would invest 4,083 in Avient Corp on August 25, 2024 and sell it today you would earn a total of 1,034 from holding Avient Corp or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Core Molding Technologies
Performance |
| Timeline |
| Avient Corp |
| Core Molding Technologies |
Avient Corp and Core Molding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Core Molding
The main advantage of trading using opposite Avient Corp and Core Molding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Core Molding 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 Core Molding will offset losses from the drop in Core Molding's long position.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| Core Molding vs. Innospec | Core Molding vs. H B Fuller | Core Molding vs. Quaker Chemical | Core Molding vs. Minerals Technologies |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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