Correlation Between Aveanna Healthcare and Univec

Can any of the company-specific risk be diversified away by investing in both Aveanna Healthcare and Univec 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 Aveanna Healthcare and Univec into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aveanna Healthcare Holdings and Univec Inc, you can compare the effects of market volatilities on Aveanna Healthcare and Univec 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 Aveanna Healthcare with a short position of Univec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aveanna Healthcare and Univec.

Diversification Opportunities for Aveanna Healthcare and Univec

-0.05

Correlation Coefficient

Aveanna Healthcare  Univec

Good diversification

The 3 months correlation between Aveanna and Univec is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aveanna Healthcare Holdings and Univec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univec Inc and Aveanna Healthcare 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 Aveanna Healthcare Holdings are associated (or correlated) with Univec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univec Inc has no effect on the direction of Aveanna Healthcare i.e., Aveanna Healthcare and Univec go up and down completely randomly.

Pair Corralation between Aveanna Healthcare and Univec

Given the investment horizon of 90 days Aveanna Healthcare Holdings is expected to generate 0.49 times more return on investment than Univec. However, Aveanna Healthcare Holdings is 2.03 times less risky than Univec. It trades about 0.02 of its potential returns per unit of risk. Univec Inc is currently generating about -0.11 per unit of risk. If you would invest  523.00  in Aveanna Healthcare Holdings on September 12, 2024 and sell it today you would lose (1.00) from holding Aveanna Healthcare Holdings or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aveanna Healthcare Holdings  vs.  Univec Inc

Aveanna Healthcare

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aveanna Healthcare Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Aveanna Healthcare is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Univec Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Univec Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aveanna Healthcare and Univec

The main advantage of trading using opposite Aveanna Healthcare and Univec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aveanna Healthcare position performs unexpectedly, Univec 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 Univec will offset losses from the drop in Univec's long position.

The idea behind Aveanna Healthcare Holdings and Univec Inc 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 Transaction History module to view history of all your transactions and understand their impact on performance.