Correlation Between AMCON Distributing and Avient Corp

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

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

Diversification Opportunities for AMCON Distributing and Avient Corp

-0.06

Correlation Coefficient

AMCON Distributing  Avient Corp

Good diversification

The 3 months correlation between AMCON and Avient is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AMCON Distributing and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing i.e., AMCON Distributing and Avient Corp go up and down completely randomly.

Pair Corralation between AMCON Distributing and Avient Corp

Considering the 90-day investment horizon AMCON Distributing is expected to under-perform the Avient Corp. In addition to that, AMCON Distributing is 1.61 times more volatile than Avient Corp. It trades about 0.0 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 21, 2024 and sell it today you would earn a total of  936.00  from holding Avient Corp or generate 28.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

AMCON Distributing  vs.  Avient Corp

AMCON Distributing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, AMCON Distributing is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 AMCON Distributing and Avient Corp

The main advantage of trading using opposite AMCON Distributing and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMCON Distributing 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 AMCON Distributing 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..