Correlation Between Avient Corp and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Thor Industries 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 Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Thor Industries, you can compare the effects of market volatilities on Avient Corp and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Thor Industries.
Diversification Opportunities for Avient Corp and Thor Industries
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avient and Thor is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Avient Corp i.e., Avient Corp and Thor Industries go up and down completely randomly.
Pair Corralation between Avient Corp and Thor Industries
Given the investment horizon of 90 days Avient Corp is expected to generate 0.8 times more return on investment than Thor Industries. However, Avient Corp is 1.25 times less risky than Thor Industries. It trades about 0.1 of its potential returns per unit of risk. Thor Industries is currently generating about 0.07 per unit of risk. If you would invest 4,798 in Avient Corp on August 28, 2024 and sell it today you would earn a total of 519.00 from holding Avient Corp or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Thor Industries
Performance |
| Timeline |
| Avient Corp |
| Thor Industries |
Avient Corp and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Thor Industries
The main advantage of trading using opposite Avient Corp and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| Thor Industries vs. Nio Class A | Thor Industries vs. Lucid Group | Thor Industries vs. Tesla Inc | Thor Industries vs. Mullen Automotive |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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