Correlation Between Advantage Solutions and East Africa
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and East Africa 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 East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and East Africa Metals, you can compare the effects of market volatilities on Advantage Solutions and East Africa 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 East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and East Africa.
Diversification Opportunities for Advantage Solutions and East Africa
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advantage and East is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals 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 East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and East Africa go up and down completely randomly.
Pair Corralation between Advantage Solutions and East Africa
Assuming the 90 days horizon Advantage Solutions is expected to generate 1.07 times less return on investment than East Africa. In addition to that, Advantage Solutions is 1.09 times more volatile than East Africa Metals. It trades about 0.06 of its total potential returns per unit of risk. East Africa Metals is currently generating about 0.07 per unit of volatility. If you would invest 6.26 in East Africa Metals on September 13, 2024 and sell it today you would earn a total of 4.74 from holding East Africa Metals or generate 75.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.4% |
| Values | Daily Returns |
Advantage Solutions vs. East Africa Metals
Performance |
| Timeline |
| Advantage Solutions |
| East Africa Metals |
Advantage Solutions and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and East Africa
The main advantage of trading using opposite Advantage Solutions and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream | Advantage Solutions vs. Aquagold International |
| East Africa vs. Advantage Solutions | East Africa vs. Atlas Corp | East Africa vs. PureCycle Technologies | East Africa 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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