Correlation Between Styrenix Performance and AVALON TECHNOLOGIES

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Can any of the company-specific risk be diversified away by investing in both Styrenix Performance and AVALON TECHNOLOGIES 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 Styrenix Performance and AVALON TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Styrenix Performance Materials and AVALON TECHNOLOGIES LTD, you can compare the effects of market volatilities on Styrenix Performance and AVALON TECHNOLOGIES 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 Styrenix Performance with a short position of AVALON TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Styrenix Performance and AVALON TECHNOLOGIES.

Diversification Opportunities for Styrenix Performance and AVALON TECHNOLOGIES

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Styrenix and AVALON is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Styrenix Performance Materials and AVALON TECHNOLOGIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVALON TECHNOLOGIES LTD and Styrenix Performance 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 Styrenix Performance Materials are associated (or correlated) with AVALON TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVALON TECHNOLOGIES LTD has no effect on the direction of Styrenix Performance i.e., Styrenix Performance and AVALON TECHNOLOGIES go up and down completely randomly.

Pair Corralation between Styrenix Performance and AVALON TECHNOLOGIES

Assuming the 90 days trading horizon Styrenix Performance Materials is expected to generate 0.67 times more return on investment than AVALON TECHNOLOGIES. However, Styrenix Performance Materials is 1.49 times less risky than AVALON TECHNOLOGIES. It trades about -0.31 of its potential returns per unit of risk. AVALON TECHNOLOGIES LTD is currently generating about -0.6 per unit of risk. If you would invest  301,530  in Styrenix Performance Materials on November 2, 2024 and sell it today you would lose (43,520) from holding Styrenix Performance Materials or give up 14.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Styrenix Performance Materials  vs.  AVALON TECHNOLOGIES LTD

 Performance 
       Timeline  
Styrenix Performance 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Styrenix Performance Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Styrenix Performance may actually be approaching a critical reversion point that can send shares even higher in March 2025.
AVALON TECHNOLOGIES LTD 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in AVALON TECHNOLOGIES LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent essential indicators, AVALON TECHNOLOGIES may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Styrenix Performance and AVALON TECHNOLOGIES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Styrenix Performance and AVALON TECHNOLOGIES

The main advantage of trading using opposite Styrenix Performance and AVALON TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Styrenix Performance position performs unexpectedly, AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES will offset losses from the drop in AVALON TECHNOLOGIES's long position.
The idea behind Styrenix Performance Materials and AVALON TECHNOLOGIES LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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