Correlation Between Advantage Solutions and Sea
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Sea, you can compare the effects of market volatilities on Advantage Solutions and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Sea.
Diversification Opportunities for Advantage Solutions and Sea
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advantage and Sea is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Sea go up and down completely randomly.
Pair Corralation between Advantage Solutions and Sea
Considering the 90-day investment horizon Advantage Solutions is expected to generate 1.25 times less return on investment than Sea. In addition to that, Advantage Solutions is 1.31 times more volatile than Sea. It trades about 0.15 of its total potential returns per unit of risk. Sea is currently generating about 0.24 per unit of volatility. If you would invest 9,939 in Sea on August 24, 2024 and sell it today you would earn a total of 1,694 from holding Sea or generate 17.04% 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. Sea
Performance |
| Timeline |
| Advantage Solutions |
| Sea |
Advantage Solutions and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Sea
The main advantage of trading using opposite Advantage Solutions and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |