Correlation Between Advantage Solutions and Digital Media
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Digital Media 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 Digital Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Digital Media Solutions, you can compare the effects of market volatilities on Advantage Solutions and Digital Media 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 Digital Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Digital Media.
Diversification Opportunities for Advantage Solutions and Digital Media
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advantage and Digital is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Digital Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Media Solutions 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 Digital Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Media Solutions has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Digital Media go up and down completely randomly.
Pair Corralation between Advantage Solutions and Digital Media
If you would invest 323.00 in Advantage Solutions on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Advantage Solutions or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Advantage Solutions vs. Digital Media Solutions
Performance |
| Timeline |
| Advantage Solutions |
| Digital Media Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Advantage Solutions and Digital Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Digital Media
The main advantage of trading using opposite Advantage Solutions and Digital Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Digital Media 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 Digital Media will offset losses from the drop in Digital Media's long position.| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
| Digital Media vs. Advantage Solutions | Digital Media vs. Townsquare Media | Digital Media vs. Entravision Communications | Digital Media vs. Emerald Expositions Events |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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