Correlation Between Avient Corp and EDISON
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By analyzing existing cross correlation between Avient Corp and EDISON INTL 4125, you can compare the effects of market volatilities on Avient Corp and EDISON 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 EDISON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and EDISON.
Diversification Opportunities for Avient Corp and EDISON
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avient and EDISON is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and EDISON INTL 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EDISON INTL 4125 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 EDISON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EDISON INTL 4125 has no effect on the direction of Avient Corp i.e., Avient Corp and EDISON go up and down completely randomly.
Pair Corralation between Avient Corp and EDISON
Given the investment horizon of 90 days Avient Corp is expected to generate 3.22 times more return on investment than EDISON. However, Avient Corp is 3.22 times more volatile than EDISON INTL 4125. It trades about 0.05 of its potential returns per unit of risk. EDISON INTL 4125 is currently generating about -0.01 per unit of risk. If you would invest 3,989 in Avient Corp on September 14, 2024 and sell it today you would earn a total of 800.50 from holding Avient Corp or generate 20.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Avient Corp vs. EDISON INTL 4125
Performance |
| Timeline |
| Avient Corp |
| EDISON INTL 4125 |
Avient Corp and EDISON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and EDISON
The main advantage of trading using opposite Avient Corp and EDISON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, EDISON 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 EDISON will offset losses from the drop in EDISON's long position.| Avient Corp vs. LyondellBasell Industries NV | Avient Corp vs. Cabot | Avient Corp vs. Westlake Chemical | Avient Corp vs. Air Products and |
| EDISON vs. AEP TEX INC | EDISON vs. US BANK NATIONAL | EDISON vs. PayPal Holdings | EDISON vs. Alphabet Inc Class C |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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