Correlation Between Advantage Solutions and Graphite One
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Graphite One 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 Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Graphite One, you can compare the effects of market volatilities on Advantage Solutions and Graphite One 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 Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Graphite One.
Diversification Opportunities for Advantage Solutions and Graphite One
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advantage and Graphite is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One 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 Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Graphite One go up and down completely randomly.
Pair Corralation between Advantage Solutions and Graphite One
Assuming the 90 days horizon Advantage Solutions is expected to generate 3.33 times more return on investment than Graphite One. However, Advantage Solutions is 3.33 times more volatile than Graphite One. It trades about 0.0 of its potential returns per unit of risk. Graphite One is currently generating about -0.06 per unit of risk. If you would invest 2.85 in Advantage Solutions on October 20, 2024 and sell it today you would lose (1.14) from holding Advantage Solutions or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.72% |
| Values | Daily Returns |
Advantage Solutions vs. Graphite One
Performance |
| Timeline |
| Advantage Solutions |
| Graphite One |
Advantage Solutions and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Graphite One
The main advantage of trading using opposite Advantage Solutions and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream |
| Graphite One vs. Mason Graphite | Graphite One vs. Northern Graphite | Graphite One vs. Lomiko Metals | Graphite One vs. IGO Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |