Correlation Between Advantage Solutions and ADTRAN
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and ADTRAN 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 Advantage Solutions and ADTRAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and ADTRAN Inc, you can compare the effects of market volatilities on Advantage Solutions and ADTRAN 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 Advantage Solutions with a short position of ADTRAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and ADTRAN.
Diversification Opportunities for Advantage Solutions and ADTRAN
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advantage and ADTRAN is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and ADTRAN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Inc and Advantage Solutions 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 Advantage Solutions are associated (or correlated) with ADTRAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Inc has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and ADTRAN go up and down completely randomly.
Pair Corralation between Advantage Solutions and ADTRAN
Considering the 90-day investment horizon Advantage Solutions is expected to generate 1.01 times more return on investment than ADTRAN. However, Advantage Solutions is 1.01 times more volatile than ADTRAN Inc. It trades about 0.03 of its potential returns per unit of risk. ADTRAN Inc is currently generating about 0.0 per unit of risk. If you would invest 220.00 in Advantage Solutions on November 19, 2024 and sell it today you would earn a total of 51.00 from holding Advantage Solutions or generate 23.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantage Solutions vs. ADTRAN Inc
Performance |
| Timeline |
| Advantage Solutions |
| ADTRAN Inc |
Advantage Solutions and ADTRAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and ADTRAN
The main advantage of trading using opposite Advantage Solutions and ADTRAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, ADTRAN 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 ADTRAN will offset losses from the drop in ADTRAN's long position.| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
| ADTRAN vs. Mynaric AG ADR | ADTRAN vs. KVH Industries | ADTRAN vs. Telesat Corp | ADTRAN vs. Digi International |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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