Correlation Between Avient Corp and Service Properties
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Service Properties 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 Avient Corp and Service Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Service Properties Trust, you can compare the effects of market volatilities on Avient Corp and Service Properties 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 Avient Corp with a short position of Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Service Properties.
Diversification Opportunities for Avient Corp and Service Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avient and Service is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust and Avient Corp 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 Avient Corp are associated (or correlated) with Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Avient Corp i.e., Avient Corp and Service Properties go up and down completely randomly.
Pair Corralation between Avient Corp and Service Properties
Given the investment horizon of 90 days Avient Corp is expected to generate 0.42 times more return on investment than Service Properties. However, Avient Corp is 2.38 times less risky than Service Properties. It trades about 0.08 of its potential returns per unit of risk. Service Properties Trust is currently generating about -0.2 per unit of risk. If you would invest 4,571 in Avient Corp on September 12, 2024 and sell it today you would earn a total of 347.00 from holding Avient Corp or generate 7.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Avient Corp vs. Service Properties Trust
Performance |
Timeline |
Avient Corp |
Service Properties Trust |
Avient Corp and Service Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Avient Corp and Service Properties
The main advantage of trading using opposite Avient Corp and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Service Properties 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 Service Properties will offset losses from the drop in Service Properties' long position.Avient Corp vs. Griffon | Avient Corp vs. Merck Company | Avient Corp vs. Brinker International | Avient Corp vs. Alcoa Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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