Correlation Between Avantium Holding and Clariant

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

By analyzing existing cross correlation between Avantium Holding BV and Clariant AG, you can compare the effects of market volatilities on Avantium Holding and Clariant 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 Avantium Holding with a short position of Clariant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantium Holding and Clariant.

Diversification Opportunities for Avantium Holding and Clariant

-0.04

Correlation Coefficient

Avantium Holding  Clariant

Good diversification

The 3 months correlation between Avantium and Clariant is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Avantium Holding BV and Clariant AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clariant AG and Avantium Holding 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 Avantium Holding BV are associated (or correlated) with Clariant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clariant AG has no effect on the direction of Avantium Holding i.e., Avantium Holding and Clariant go up and down completely randomly.

Pair Corralation between Avantium Holding and Clariant

Assuming the 90 days trading horizon Avantium Holding BV is expected to generate 3.6 times more return on investment than Clariant. However, Avantium Holding is 3.6 times more volatile than Clariant AG. It trades about 0.19 of its potential returns per unit of risk. Clariant AG is currently generating about 0.05 per unit of risk. If you would invest  748.00  in Avantium Holding BV on April 24, 2025 and sell it today you would earn a total of  768.00  from holding Avantium Holding BV or generate 102.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Avantium Holding BV  vs.  Clariant AG

Avantium Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avantium Holding BV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Avantium Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clariant AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clariant AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Clariant is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Avantium Holding and Clariant

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

The idea behind Avantium Holding BV and Clariant AG 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.