Correlation Between Croghan Bancshares and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Croghan Bancshares 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 Croghan Bancshares and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Croghan Bancshares and Avient Corp, you can compare the effects of market volatilities on Croghan Bancshares 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 Croghan Bancshares with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Croghan Bancshares and Avient Corp.
Diversification Opportunities for Croghan Bancshares and Avient Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Croghan and Avient is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Croghan Bancshares and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Croghan Bancshares 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 Croghan Bancshares 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 Croghan Bancshares i.e., Croghan Bancshares and Avient Corp go up and down completely randomly.
Pair Corralation between Croghan Bancshares and Avient Corp
Given the investment horizon of 90 days Croghan Bancshares is expected to generate 1.46 times less return on investment than Avient Corp. But when comparing it to its historical volatility, Croghan Bancshares is 1.48 times less risky than Avient Corp. It trades about 0.06 of its potential returns per unit of risk. Avient Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,862 in Avient Corp on September 12, 2024 and sell it today you would earn a total of 1,054 from holding Avient Corp or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.5% |
| Values | Daily Returns |
Croghan Bancshares vs. Avient Corp
Performance |
| Timeline |
| Croghan Bancshares |
| Avient Corp |
Croghan Bancshares and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Croghan Bancshares and Avient Corp
The main advantage of trading using opposite Croghan Bancshares and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Croghan Bancshares 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.| Croghan Bancshares vs. Lifevantage | Croghan Bancshares vs. Olympic Steel | Croghan Bancshares vs. Magnite | Croghan Bancshares vs. Flexible Solutions International |
| Avient Corp vs. Griffon | Avient Corp vs. Merck Company | Avient Corp vs. Brinker International | Avient Corp vs. Alcoa Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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