Correlation Between Avient Corp and Sea
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Sea, you can compare the effects of market volatilities on Avient Corp and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Sea.
Diversification Opportunities for Avient Corp and Sea
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avient and Sea is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Avient Corp i.e., Avient Corp and Sea go up and down completely randomly.
Pair Corralation between Avient Corp and Sea
Given the investment horizon of 90 days Avient Corp is expected to generate 1.71 times less return on investment than Sea. But when comparing it to its historical volatility, Avient Corp is 1.64 times less risky than Sea. It trades about 0.27 of its potential returns per unit of risk. Sea is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 9,538 in Sea on September 2, 2024 and sell it today you would earn a total of 1,842 from holding Sea or generate 19.31% 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. Sea
Performance |
| Timeline |
| Avient Corp |
| Sea |
Avient Corp and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Sea
The main advantage of trading using opposite Avient Corp and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Avient Corp vs. Linde plc Ordinary | Avient Corp vs. Air Products and | Avient Corp vs. Aquagold International | Avient Corp vs. Thrivent High Yield |
| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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