Correlation Between Advantage Solutions and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and OceanaGold, you can compare the effects of market volatilities on Advantage Solutions and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and OceanaGold.
Diversification Opportunities for Advantage Solutions and OceanaGold
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advantage and OceanaGold is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and OceanaGold go up and down completely randomly.
Pair Corralation between Advantage Solutions and OceanaGold
Assuming the 90 days horizon Advantage Solutions is expected to under-perform the OceanaGold. In addition to that, Advantage Solutions is 4.58 times more volatile than OceanaGold. It trades about -0.02 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.22 per unit of volatility. If you would invest 279.00 in OceanaGold on September 5, 2024 and sell it today you would earn a total of 38.00 from holding OceanaGold or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Advantage Solutions vs. OceanaGold
Performance |
| Timeline |
| Advantage Solutions |
| OceanaGold |
Advantage Solutions and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and OceanaGold
The main advantage of trading using opposite Advantage Solutions and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold's long position.| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream |
| OceanaGold vs. Cache Exploration | OceanaGold vs. Evolution Mining | OceanaGold vs. Northern Star Resources | OceanaGold vs. Wesdome Gold Mines |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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