Correlation Between AMERICAN and Avient Corp
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By analyzing existing cross correlation between AMERICAN EXPRESS PANY and Avient Corp, you can compare the effects of market volatilities on AMERICAN 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 AMERICAN with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMERICAN and Avient Corp.
Diversification Opportunities for AMERICAN and Avient Corp
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMERICAN and Avient is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AMERICAN EXPRESS PANY and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and AMERICAN 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 AMERICAN EXPRESS PANY 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 AMERICAN i.e., AMERICAN and Avient Corp go up and down completely randomly.
Pair Corralation between AMERICAN and Avient Corp
Assuming the 90 days trading horizon AMERICAN is expected to generate 26.68 times less return on investment than Avient Corp. But when comparing it to its historical volatility, AMERICAN EXPRESS PANY is 8.62 times less risky than Avient Corp. It trades about 0.03 of its potential returns per unit of risk. Avient Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,566 in Avient Corp on September 4, 2024 and sell it today you would earn a total of 1,568 from holding Avient Corp or generate 43.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
AMERICAN EXPRESS PANY vs. Avient Corp
Performance |
| Timeline |
| AMERICAN EXPRESS PANY |
| Avient Corp |
AMERICAN and Avient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMERICAN and Avient Corp
The main advantage of trading using opposite AMERICAN and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMERICAN 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.| AMERICAN vs. Antero Midstream Partners | AMERICAN vs. One Gas | AMERICAN vs. Kenon Holdings | AMERICAN vs. Seadrill Limited |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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