Correlation Between ADC Therapeutics and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both ADC Therapeutics and Advantage Solutions 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 ADC Therapeutics and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADC Therapeutics SA and Advantage Solutions, you can compare the effects of market volatilities on ADC Therapeutics and Advantage Solutions 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 ADC Therapeutics with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADC Therapeutics and Advantage Solutions.
Diversification Opportunities for ADC Therapeutics and Advantage Solutions
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADC and Advantage is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ADC Therapeutics SA and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and ADC Therapeutics 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 ADC Therapeutics SA are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of ADC Therapeutics i.e., ADC Therapeutics and Advantage Solutions go up and down completely randomly.
Pair Corralation between ADC Therapeutics and Advantage Solutions
Given the investment horizon of 90 days ADC Therapeutics SA is expected to under-perform the Advantage Solutions. In addition to that, ADC Therapeutics is 1.17 times more volatile than Advantage Solutions. It trades about -0.23 of its total potential returns per unit of risk. Advantage Solutions is currently generating about 0.17 per unit of volatility. If you would invest 311.00 in Advantage Solutions on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Advantage Solutions or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ADC Therapeutics SA vs. Advantage Solutions
Performance |
| Timeline |
| ADC Therapeutics |
| Advantage Solutions |
ADC Therapeutics and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADC Therapeutics and Advantage Solutions
The main advantage of trading using opposite ADC Therapeutics and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADC Therapeutics position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| ADC Therapeutics vs. Passage Bio | ADC Therapeutics vs. Black Diamond Therapeutics | ADC Therapeutics vs. Alector | ADC Therapeutics vs. Century Therapeutics |
| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
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 the CEOs Directory module to screen CEOs from public companies around the world.
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