Correlation Between Sligro Food and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Sligro Food 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 Sligro Food and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Avient Corp, you can compare the effects of market volatilities on Sligro Food 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 Sligro Food with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Avient Corp.
Diversification Opportunities for Sligro Food and Avient Corp
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sligro and Avient is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Sligro Food 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 Sligro Food Group 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 Sligro Food i.e., Sligro Food and Avient Corp go up and down completely randomly.
Pair Corralation between Sligro Food and Avient Corp
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Avient Corp. In addition to that, Sligro Food is 1.23 times more volatile than Avient Corp. It trades about -0.21 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.13 per unit of volatility. If you would invest 4,852 in Avient Corp on August 31, 2024 and sell it today you would earn a total of 276.00 from holding Avient Corp or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Avient Corp
Performance |
| Timeline |
| Sligro Food Group |
| Avient Corp |
Sligro Food and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Avient Corp
The main advantage of trading using opposite Sligro Food and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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.| Sligro Food vs. Legacy Education | Sligro Food vs. Apple Inc | Sligro Food vs. NVIDIA | Sligro Food vs. Microsoft |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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