Correlation Between Lion One and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Avient Corp, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Avient Corp.
Diversification Opportunities for Lion One and Avient Corp
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Avient is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Avient Corp go up and down completely randomly.
Pair Corralation between Lion One and Avient Corp
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Avient Corp. In addition to that, Lion One is 1.99 times more volatile than Avient Corp. It trades about -0.04 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.05 per unit of volatility. If you would invest 3,351 in Avient Corp on September 3, 2024 and sell it today you would earn a total of 1,774 from holding Avient Corp or generate 52.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Avient Corp
Performance |
| Timeline |
| Lion One Metals |
| Avient Corp |
Lion One and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Avient Corp
The main advantage of trading using opposite Lion One and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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