Correlation Between Avantor and Hawkins

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Can any of the company-specific risk be diversified away by investing in both Avantor and Hawkins 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 Avantor and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantor and Hawkins, you can compare the effects of market volatilities on Avantor and Hawkins 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 Avantor with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantor and Hawkins.

Diversification Opportunities for Avantor and Hawkins

-0.17
  Correlation Coefficient

Good diversification

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

Pair Corralation between Avantor and Hawkins

Given the investment horizon of 90 days Avantor is expected to under-perform the Hawkins. In addition to that, Avantor is 1.13 times more volatile than Hawkins. It trades about -0.12 of its total potential returns per unit of risk. Hawkins is currently generating about 0.02 per unit of volatility. If you would invest  3,675  in Hawkins on July 9, 2022 and sell it today you would earn a total of  98.00  from holding Hawkins or generate 2.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Avantor  vs.  Hawkins

 Performance (%) 
       Timeline  
Avantor 
Avantor Performance
0 of 100
Over the last 90 days Avantor has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Avantor Price Channel

Hawkins 
Hawkins Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in November 2022.

Hawkins Price Channel

Avantor and Hawkins Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Avantor and Hawkins

The main advantage of trading using opposite Avantor and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantor position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.
Avantor vs. Amazon Inc
The idea behind Avantor and Hawkins 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.
Hawkins vs. Amazon Inc
Check out your portfolio center. 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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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