Correlation Between Hawkins and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and Avient Corp, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and Avient Corp.
Diversification Opportunities for Hawkins and Avient Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hawkins and Avient is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and Avient Corp go up and down completely randomly.
Pair Corralation between Hawkins and Avient Corp
Given the investment horizon of 90 days Hawkins is expected to generate 1.1 times less return on investment than Avient Corp. In addition to that, Hawkins is 1.64 times more volatile than Avient Corp. It trades about 0.09 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.16 per unit of volatility. If you would invest 4,787 in Avient Corp on August 24, 2024 and sell it today you would earn a total of 330.00 from holding Avient Corp or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. Avient Corp
Performance |
| Timeline |
| Hawkins |
| Avient Corp |
Hawkins and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and Avient Corp
The main advantage of trading using opposite Hawkins and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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