Correlation Between Amex Exploration and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Amex Exploration and Advantage Solutions 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 Amex Exploration and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amex Exploration and Advantage Solutions, you can compare the effects of market volatilities on Amex Exploration and Advantage Solutions 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 Amex Exploration with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amex Exploration and Advantage Solutions.
Diversification Opportunities for Amex Exploration and Advantage Solutions
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amex and Advantage is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amex Exploration and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Amex Exploration 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 Amex Exploration are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Amex Exploration i.e., Amex Exploration and Advantage Solutions go up and down completely randomly.
Pair Corralation between Amex Exploration and Advantage Solutions
Assuming the 90 days horizon Amex Exploration is expected to under-perform the Advantage Solutions. But the otc stock apears to be less risky and, when comparing its historical volatility, Amex Exploration is 3.95 times less risky than Advantage Solutions. The otc stock trades about -0.02 of its potential returns per unit of risk. The Advantage Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.10 in Advantage Solutions on September 15, 2024 and sell it today you would lose (2.42) from holding Advantage Solutions or give up 59.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Amex Exploration vs. Advantage Solutions
Performance |
| Timeline |
| Amex Exploration |
| Advantage Solutions |
Amex Exploration and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amex Exploration and Advantage Solutions
The main advantage of trading using opposite Amex Exploration and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amex Exploration position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| Amex Exploration vs. Minnova Corp | Amex Exploration vs. Argo Gold | Amex Exploration vs. Advance Gold Corp | Amex Exploration vs. Blue Star Gold |
| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream | Advantage Solutions vs. Aquagold International |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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