Correlation Between Abcellera Biologics and Avient Corp

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

By analyzing existing cross correlation between Abcellera Biologics and Avient Corp, you can compare the effects of market volatilities on Abcellera Biologics 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 Abcellera Biologics with a short position of Avient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abcellera Biologics and Avient Corp.

Diversification Opportunities for Abcellera Biologics and Avient Corp

0.17

Correlation Coefficient

Abcellera Biologics  Avient Corp

Average diversification

The 3 months correlation between Abcellera and Avient is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Abcellera Biologics and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and Abcellera Biologics 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 Abcellera Biologics 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 Abcellera Biologics i.e., Abcellera Biologics and Avient Corp go up and down completely randomly.

Pair Corralation between Abcellera Biologics and Avient Corp

Given the investment horizon of 90 days Abcellera Biologics is expected to under-perform the Avient Corp. In addition to that, Abcellera Biologics is 1.73 times more volatile than Avient Corp. It trades about -0.05 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.04 per unit of volatility. If you would invest  3,233  in Avient Corp on September 23, 2024 and sell it today you would earn a total of  917.00  from holding Avient Corp or generate 28.36% return on investment over 90 days.

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

Abcellera Biologics  vs.  Avient Corp

Abcellera Biologics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Abcellera Biologics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Avient Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avient Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Abcellera Biologics and Avient Corp

The main advantage of trading using opposite Abcellera Biologics and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abcellera Biologics 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.

The idea behind Abcellera Biologics and Avient Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.