Correlation Between BTB Real and Avient Corp
Can any of the company-specific risk be diversified away by investing in both BTB Real and Avient Corp 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 BTB Real and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTB Real Estate and Avient Corp, you can compare the effects of market volatilities on BTB Real and Avient Corp 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 BTB Real with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and Avient Corp.
Diversification Opportunities for BTB Real and Avient Corp
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BTB and Avient is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and BTB Real 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 BTB Real Estate are associated (or correlated) with Avient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avient Corp has no effect on the direction of BTB Real i.e., BTB Real and Avient Corp go up and down completely randomly.
Pair Corralation between BTB Real and Avient Corp
Assuming the 90 days horizon BTB Real Estate is expected to under-perform the Avient Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, BTB Real Estate is 2.69 times less risky than Avient Corp. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Avient Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,661 in Avient Corp on September 1, 2024 and sell it today you would earn a total of 464.00 from holding Avient Corp or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTB Real Estate vs. Avient Corp
Performance |
| Timeline |
| BTB Real Estate |
| Avient Corp |
BTB Real and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTB Real and Avient Corp
The main advantage of trading using opposite BTB Real and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real position performs unexpectedly, Avient Corp 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 Avient Corp will offset losses from the drop in Avient Corp's long position.| BTB Real vs. Boston Properties | BTB Real vs. Kilroy Realty Corp | BTB Real vs. SL Green Realty | BTB Real vs. Vornado Realty Trust |
| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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