Correlation Between Everest and Avery Dennison

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

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

Diversification Opportunities for Everest and Avery Dennison

0.0

Correlation Coefficient

Everest  Avery Dennison

Pay attention - limited upside

The 3 months correlation between Everest and Avery is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Avery Dennison Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avery Dennison Corp and Everest 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 Everest Group are associated (or correlated) with Avery Dennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avery Dennison Corp has no effect on the direction of Everest i.e., Everest and Avery Dennison go up and down completely randomly.

Pair Corralation between Everest and Avery Dennison

Allowing for the 90-day total investment horizon Everest Group is expected to under-perform the Avery Dennison. But the stock apears to be less risky and, when comparing its historical volatility, Everest Group is 1.18 times less risky than Avery Dennison. The stock trades about -0.04 of its potential returns per unit of risk. The Avery Dennison Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  16,930  in Avery Dennison Corp on May 6, 2025 and sell it today you would lose (348.00) from holding Avery Dennison Corp or give up 2.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Everest Group  vs.  Avery Dennison Corp

Everest Group

Risk-Adjusted Performance

Very Weak

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

Avery Dennison Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avery Dennison Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Avery Dennison is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Everest and Avery Dennison

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

The idea behind Everest Group and Avery Dennison 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.