Correlation Between World Houseware and Avient Corp

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

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

Diversification Opportunities for World Houseware and Avient Corp

0.0

Correlation Coefficient

World Houseware  Avient Corp

Pay attention - limited upside

The 3 months correlation between World and Avient is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding World Houseware Limited and Avient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avient Corp and World Houseware 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 World Houseware Limited 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 World Houseware i.e., World Houseware and Avient Corp go up and down completely randomly.

Pair Corralation between World Houseware and Avient Corp

Assuming the 90 days horizon World Houseware Limited is expected to under-perform the Avient Corp. In addition to that, World Houseware is 2.13 times more volatile than Avient Corp. It trades about -0.01 of its total potential returns per unit of risk. Avient Corp is currently generating about 0.02 per unit of volatility. If you would invest  3,601  in Avient Corp on September 29, 2024 and sell it today you would earn a total of  444.00  from holding Avient Corp or generate 12.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

World Houseware Limited  vs.  Avient Corp

World Houseware

Risk-Adjusted Performance

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Very Weak

Over the last 90 days World Houseware Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, World Houseware is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 unsteady 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 World Houseware and Avient Corp

The main advantage of trading using opposite World Houseware and Avient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Houseware 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 World Houseware Limited 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.