Correlation Between Avient Corp and Top KingWin

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

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

Diversification Opportunities for Avient Corp and Top KingWin

0.26

Correlation Coefficient

Avient Corp  Top KingWin

Modest diversification

The 3 months correlation between Avient and Top is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Top KingWin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Avient Corp i.e., Avient Corp and Top KingWin go up and down completely randomly.

Pair Corralation between Avient Corp and Top KingWin

Given the investment horizon of 90 days Avient Corp is expected to generate 0.22 times more return on investment than Top KingWin. However, Avient Corp is 4.59 times less risky than Top KingWin. It trades about -0.62 of its potential returns per unit of risk. Top KingWin is currently generating about -0.15 per unit of risk. If you would invest  5,099  in Avient Corp on September 28, 2024 and sell it today you would lose (1,063) from holding Avient Corp or give up 20.85% of portfolio value over 90 days.

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

Avient Corp  vs.  Top KingWin

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.

Top KingWin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Top KingWin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Avient Corp and Top KingWin

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

The idea behind Avient Corp and Top KingWin 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.