Correlation Between Avient Corp and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Kenon Holdings 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 Kenon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Kenon Holdings, you can compare the effects of market volatilities on Avient Corp and Kenon Holdings 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Kenon Holdings.
Diversification Opportunities for Avient Corp and Kenon Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avient and Kenon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Avient Corp i.e., Avient Corp and Kenon Holdings go up and down completely randomly.
Pair Corralation between Avient Corp and Kenon Holdings
Given the investment horizon of 90 days Avient Corp is expected to generate 2.26 times less return on investment than Kenon Holdings. But when comparing it to its historical volatility, Avient Corp is 1.04 times less risky than Kenon Holdings. It trades about 0.08 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,563 in Kenon Holdings on September 12, 2024 and sell it today you would earn a total of 512.00 from holding Kenon Holdings or generate 19.98% 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. Kenon Holdings
Performance |
| Timeline |
| Avient Corp |
| Kenon Holdings |
Avient Corp and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Kenon Holdings
The main advantage of trading using opposite Avient Corp and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Avient Corp vs. Griffon | Avient Corp vs. Merck Company | Avient Corp vs. Brinker International | Avient Corp vs. Alcoa Corp |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |