Correlation Between Avient Corp and Mayfair Gold

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

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

Diversification Opportunities for Avient Corp and Mayfair Gold

0.25

Correlation Coefficient

Avient Corp  Mayfair Gold

Modest diversification

The 3 months correlation between Avient and Mayfair is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair Gold Corp 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 Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of Avient Corp i.e., Avient Corp and Mayfair Gold go up and down completely randomly.

Pair Corralation between Avient Corp and Mayfair Gold

Given the investment horizon of 90 days Avient Corp is expected to generate 0.74 times more return on investment than Mayfair Gold. However, Avient Corp is 1.36 times less risky than Mayfair Gold. It trades about 0.1 of its potential returns per unit of risk. Mayfair Gold Corp is currently generating about 0.06 per unit of risk. If you would invest  4,661  in Avient Corp on September 4, 2024 and sell it today you would earn a total of  496.00  from holding Avient Corp or generate 10.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Avient Corp  vs.  Mayfair Gold Corp

Avient Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Avient Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Avient Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mayfair Gold Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mayfair Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Mayfair Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Avient Corp and Mayfair Gold

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

The idea behind Avient Corp and Mayfair Gold 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.