Correlation Between US Global and Avient Corp
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Avient Corp, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Avient Corp.
Diversification Opportunities for US Global and Avient Corp
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GROW and Avient is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and US Global 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 US Global Investors 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 US Global i.e., US Global and Avient Corp go up and down completely randomly.
Pair Corralation between US Global and Avient Corp
Given the investment horizon of 90 days US Global Investors is expected to under-perform the Avient Corp. But the stock apears to be less risky and, when comparing its historical volatility, US Global Investors is 1.45 times less risky than Avient Corp. The stock trades about -0.04 of its potential returns per unit of risk. The Avient Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,705 in Avient Corp on September 2, 2024 and sell it today you would earn a total of 420.00 from holding Avient Corp or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Avient Corp
Performance |
| Timeline |
| US Global Investors |
| Avient Corp |
US Global and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Avient Corp
The main advantage of trading using opposite US Global and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| Avient Corp vs. Linde plc Ordinary | Avient Corp vs. Air Products and | Avient Corp vs. Aquagold International | Avient Corp vs. Thrivent High Yield |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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