Correlation Between East Africa and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both East Africa 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 East Africa and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Advantage Solutions, you can compare the effects of market volatilities on East Africa 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 East Africa with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Advantage Solutions.
Diversification Opportunities for East Africa and Advantage Solutions
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between East and Advantage is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and Advantage Solutions go up and down completely randomly.
Pair Corralation between East Africa and Advantage Solutions
Assuming the 90 days horizon East Africa Metals is expected to generate 0.92 times more return on investment than Advantage Solutions. However, East Africa Metals is 1.09 times less risky than Advantage Solutions. It trades about 0.07 of its potential returns per unit of risk. Advantage Solutions is currently generating about 0.06 per unit of risk. 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 |
East Africa Metals vs. Advantage Solutions
Performance |
| Timeline |
| East Africa Metals |
| Advantage Solutions |
East Africa and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Advantage Solutions
The main advantage of trading using opposite East Africa and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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.| East Africa vs. Advantage Solutions | East Africa vs. Atlas Corp | East Africa vs. PureCycle Technologies | East Africa vs. WM Technology |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |