Correlation Between Advantage Solutions and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Bridgetown Holdings 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 Bridgetown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Bridgetown Holdings, you can compare the effects of market volatilities on Advantage Solutions and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Bridgetown Holdings.
Diversification Opportunities for Advantage Solutions and Bridgetown Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advantage and Bridgetown is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings 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 Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Advantage Solutions and Bridgetown Holdings
Assuming the 90 days horizon Advantage Solutions is expected to generate 1.32 times more return on investment than Bridgetown Holdings. However, Advantage Solutions is 1.32 times more volatile than Bridgetown Holdings. It trades about 0.05 of its potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.06 per unit of risk. If you would invest 20.00 in Advantage Solutions on August 24, 2024 and sell it today you would lose (17.30) from holding Advantage Solutions or give up 86.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.29% |
| Values | Daily Returns |
Advantage Solutions vs. Bridgetown Holdings
Performance |
| Timeline |
| Advantage Solutions |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Advantage Solutions and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Bridgetown Holdings
The main advantage of trading using opposite Advantage Solutions and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream |
| Bridgetown Holdings vs. Cincinnati Financial | Bridgetown Holdings vs. Siriuspoint | Bridgetown Holdings vs. Artisan Partners Asset | Bridgetown Holdings vs. Trupanion |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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