Correlation Between Summa Silver and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Avient Corp, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Avient Corp.
Diversification Opportunities for Summa Silver and Avient Corp
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Summa and Avient is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Summa Silver 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 Summa Silver Corp 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 Summa Silver i.e., Summa Silver and Avient Corp go up and down completely randomly.
Pair Corralation between Summa Silver and Avient Corp
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Avient Corp. In addition to that, Summa Silver is 2.4 times more volatile than Avient Corp. It trades about -0.02 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 3,297 in Avient Corp on September 2, 2024 and sell it today you would earn a total of 1,828 from holding Avient Corp or generate 55.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summa Silver Corp vs. Avient Corp
Performance |
| Timeline |
| Summa Silver Corp |
| Avient Corp |
Summa Silver and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Avient Corp
The main advantage of trading using opposite Summa Silver and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. HUMANA INC | Summa Silver vs. SCOR PK | Summa Silver vs. Aquagold International | Summa Silver vs. Thrivent High Yield |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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