Correlation Between Integral and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Advantage Solutions, you can compare the effects of market volatilities on Integral 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 Integral with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Advantage Solutions.
Diversification Opportunities for Integral and Advantage Solutions
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integral and Advantage is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Advantage Solutions go up and down completely randomly.
Pair Corralation between Integral and Advantage Solutions
Considering the 90-day investment horizon Integral Ad Science is expected to generate 0.57 times more return on investment than Advantage Solutions. However, Integral Ad Science is 1.74 times less risky than Advantage Solutions. It trades about 0.0 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.06 per unit of risk. If you would invest 1,058 in Integral Ad Science on November 3, 2024 and sell it today you would lose (7.50) from holding Integral Ad Science or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. Advantage Solutions
Performance |
| Timeline |
| Integral Ad Science |
| Advantage Solutions |
Integral and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Advantage Solutions
The main advantage of trading using opposite Integral and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.The idea behind Integral Ad Science and Advantage Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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