Correlation Between Hannan Metals and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Hannan Metals 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 Hannan Metals and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannan Metals and Advantage Solutions, you can compare the effects of market volatilities on Hannan Metals 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 Hannan Metals with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannan Metals and Advantage Solutions.
Diversification Opportunities for Hannan Metals and Advantage Solutions
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hannan and Advantage is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hannan Metals and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Hannan Metals 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 Hannan 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 Hannan Metals i.e., Hannan Metals and Advantage Solutions go up and down completely randomly.
Pair Corralation between Hannan Metals and Advantage Solutions
Assuming the 90 days horizon Hannan Metals is expected to generate 0.59 times more return on investment than Advantage Solutions. However, Hannan Metals is 1.69 times less risky than Advantage Solutions. It trades about 0.39 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.13 per unit of risk. If you would invest 34.00 in Hannan Metals on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Hannan Metals or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Hannan Metals vs. Advantage Solutions
Performance |
| Timeline |
| Hannan Metals |
| Advantage Solutions |
Hannan Metals and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannan Metals and Advantage Solutions
The main advantage of trading using opposite Hannan Metals and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannan Metals 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.| Hannan Metals vs. Atco Mining | Hannan Metals vs. Leading Edge Materials | Hannan Metals vs. Arianne Phosphate | Hannan Metals vs. Global Battery Metals |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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