Correlation Between Advantage Solutions and Cascades
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Cascades 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 Cascades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Cascades, you can compare the effects of market volatilities on Advantage Solutions and Cascades 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 Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Cascades.
Diversification Opportunities for Advantage Solutions and Cascades
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advantage and Cascades is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades 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 Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Cascades go up and down completely randomly.
Pair Corralation between Advantage Solutions and Cascades
Assuming the 90 days horizon Advantage Solutions is expected to under-perform the Cascades. In addition to that, Advantage Solutions is 7.75 times more volatile than Cascades. It trades about -0.02 of its total potential returns per unit of risk. Cascades is currently generating about 0.27 per unit of volatility. If you would invest 770.00 in Cascades on September 5, 2024 and sell it today you would earn a total of 73.00 from holding Cascades or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Advantage Solutions vs. Cascades
Performance |
| Timeline |
| Advantage Solutions |
| Cascades |
Advantage Solutions and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Cascades
The main advantage of trading using opposite Advantage Solutions and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream |
| Cascades vs. Advantage Solutions | Cascades vs. Atlas Corp | Cascades vs. PureCycle Technologies | Cascades vs. WM Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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