Correlation Between Avient Corp and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Yum Brands 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 Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Yum Brands, you can compare the effects of market volatilities on Avient Corp and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Yum Brands.
Diversification Opportunities for Avient Corp and Yum Brands
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Avient and Yum is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of Avient Corp i.e., Avient Corp and Yum Brands go up and down completely randomly.
Pair Corralation between Avient Corp and Yum Brands
Given the investment horizon of 90 days Avient Corp is expected to generate 1.83 times more return on investment than Yum Brands. However, Avient Corp is 1.83 times more volatile than Yum Brands. It trades about 0.2 of its potential returns per unit of risk. Yum Brands is currently generating about 0.07 per unit of risk. If you would invest 4,892 in Avient Corp on August 28, 2024 and sell it today you would earn a total of 425.00 from holding Avient Corp or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Yum Brands
Performance |
| Timeline |
| Avient Corp |
| Yum Brands |
Avient Corp and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Yum Brands
The main advantage of trading using opposite Avient Corp and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| Yum Brands vs. Shake Shack | Yum Brands vs. Papa Johns International | Yum Brands vs. Dominos Pizza | Yum Brands vs. Jack In The |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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