Correlation Between Advantage Solutions and Lion One
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Lion 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 Lion 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 Lion One Metals, you can compare the effects of market volatilities on Advantage Solutions and Lion 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Lion One.
Diversification Opportunities for Advantage Solutions and Lion One
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advantage and Lion is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Lion One go up and down completely randomly.
Pair Corralation between Advantage Solutions and Lion One
Assuming the 90 days horizon Advantage Solutions is expected to under-perform the Lion One. In addition to that, Advantage Solutions is 3.43 times more volatile than Lion One Metals. It trades about -0.13 of its total potential returns per unit of risk. Lion One Metals is currently generating about -0.27 per unit of volatility. If you would invest 22.00 in Lion One Metals on September 13, 2024 and sell it today you would lose (4.00) from holding Lion One Metals or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Advantage Solutions vs. Lion One Metals
Performance |
| Timeline |
| Advantage Solutions |
| Lion One Metals |
Advantage Solutions and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and Lion One
The main advantage of trading using opposite Advantage Solutions and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Lion 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 Lion One will offset losses from the drop in Lion One's long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream | Advantage Solutions vs. Aquagold International |
| Lion One vs. Advantage Solutions | Lion One vs. Atlas Corp | Lion One vs. PureCycle Technologies | Lion One 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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