Correlation Between Sensient Technologies and Avient Corp
Can any of the company-specific risk be diversified away by investing in both Sensient Technologies 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 Sensient Technologies and Avient Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sensient Technologies and Avient Corp, you can compare the effects of market volatilities on Sensient Technologies 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 Sensient Technologies with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sensient Technologies and Avient Corp.
Diversification Opportunities for Sensient Technologies and Avient Corp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sensient and Avient is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sensient Technologies and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Sensient Technologies 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 Sensient Technologies 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 Sensient Technologies i.e., Sensient Technologies and Avient Corp go up and down completely randomly.
Pair Corralation between Sensient Technologies and Avient Corp
Considering the 90-day investment horizon Sensient Technologies is expected to under-perform the Avient Corp. In addition to that, Sensient Technologies is 1.45 times more volatile than Avient Corp. It trades about -0.06 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 4,244 in Avient Corp on November 18, 2024 and sell it today you would earn a total of 55.00 from holding Avient Corp or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sensient Technologies vs. Avient Corp
Performance |
| Timeline |
| Sensient Technologies |
| Avient Corp |
Sensient Technologies and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sensient Technologies and Avient Corp
The main advantage of trading using opposite Sensient Technologies and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sensient Technologies 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.| Sensient Technologies vs. Innospec | Sensient Technologies vs. Minerals Technologies | Sensient Technologies vs. Oil Dri | Sensient Technologies vs. H B Fuller |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |