Correlation Between Advantage Solutions and Cheer Holding
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Cheer 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 Advantage Solutions and Cheer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Cheer Holding, you can compare the effects of market volatilities on Advantage Solutions and Cheer 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 Advantage Solutions with a short position of Cheer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Cheer Holding.
Diversification Opportunities for Advantage Solutions and Cheer Holding
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advantage and Cheer is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding 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 Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Cheer Holding go up and down completely randomly.
Pair Corralation between Advantage Solutions and Cheer Holding
Considering the 90-day investment horizon Advantage Solutions is expected to generate 2.18 times more return on investment than Cheer Holding. However, Advantage Solutions is 2.18 times more volatile than Cheer Holding. It trades about 0.15 of its potential returns per unit of risk. Cheer Holding is currently generating about -0.39 per unit of risk. If you would invest 306.00 in Advantage Solutions on August 24, 2024 and sell it today you would earn a total of 38.00 from holding Advantage Solutions or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantage Solutions vs. Cheer Holding
Performance |
| Timeline |
| Advantage Solutions |
| Cheer Holding |
Advantage Solutions and Cheer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Cheer Holding
The main advantage of trading using opposite Advantage Solutions and Cheer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Cheer 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 Cheer Holding will offset losses from the drop in Cheer Holding's long position.The idea behind Advantage Solutions and Cheer Holding 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.| Cheer Holding vs. First Ship Lease | Cheer Holding vs. Tarsus Pharmaceuticals | Cheer Holding vs. Inhibrx | Cheer Holding vs. Abcellera Biologics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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