Correlation Between Clariant and Avantium Holding

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

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

Diversification Opportunities for Clariant and Avantium Holding

0.39

Correlation Coefficient

Clariant  Avantium Holding

Weak diversification

The 3 months correlation between Clariant and Avantium is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Clariant AG and Avantium Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantium Holding and Clariant 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 Clariant AG are associated (or correlated) with Avantium Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantium Holding has no effect on the direction of Clariant i.e., Clariant and Avantium Holding go up and down completely randomly.

Pair Corralation between Clariant and Avantium Holding

Assuming the 90 days trading horizon Clariant is expected to generate 13.63 times less return on investment than Avantium Holding. But when comparing it to its historical volatility, Clariant AG is 3.63 times less risky than Avantium Holding. It trades about 0.05 of its potential returns per unit of risk. Avantium Holding BV is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  722.00  in Avantium Holding BV on April 22, 2025 and sell it today you would earn a total of  780.00  from holding Avantium Holding BV or generate 108.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Clariant AG  vs.  Avantium Holding BV

Clariant AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clariant AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Clariant may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with Clariant and Avantium Holding

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

The idea behind Clariant AG and Avantium Holding BV 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.