Correlation Between Avient Corp and Sable Offshore

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

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

Diversification Opportunities for Avient Corp and Sable Offshore

0.17

Correlation Coefficient

Avient Corp  Sable Offshore

Average diversification

The 3 months correlation between Avient and Sable is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Sable Offshore Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sable Offshore 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 Sable Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sable Offshore Corp has no effect on the direction of Avient Corp i.e., Avient Corp and Sable Offshore go up and down completely randomly.

Pair Corralation between Avient Corp and Sable Offshore

Given the investment horizon of 90 days Avient Corp is expected to generate 0.33 times more return on investment than Sable Offshore. However, Avient Corp is 3.04 times less risky than Sable Offshore. It trades about -0.17 of its potential returns per unit of risk. Sable Offshore Corp is currently generating about -0.14 per unit of risk. If you would invest  5,108  in Avient Corp on September 13, 2024 and sell it today you would lose (246.00) from holding Avient Corp or give up 4.82% of portfolio value over 90 days.

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

Avient Corp  vs.  Sable Offshore Corp

Avient Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Avient Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Avient Corp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sable Offshore Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sable Offshore Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sable Offshore is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Avient Corp and Sable Offshore

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

The idea behind Avient Corp and Sable Offshore 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.