Correlation Between Lion One and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Advantage Solutions, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Advantage Solutions.
Diversification Opportunities for Lion One and Advantage Solutions
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lion and Advantage is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Lion One 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 Lion One 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 Lion One i.e., Lion One and Advantage Solutions go up and down completely randomly.
Pair Corralation between Lion One and Advantage Solutions
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Advantage Solutions. But the otc stock apears to be less risky and, when comparing its historical volatility, Lion One Metals is 4.01 times less risky than Advantage Solutions. The otc stock trades about -0.31 of its potential returns per unit of risk. The Advantage Solutions is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Advantage Solutions on September 5, 2024 and sell it today you would lose (0.51) from holding Advantage Solutions or give up 20.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Lion One Metals vs. Advantage Solutions
Performance |
| Timeline |
| Lion One Metals |
| Advantage Solutions |
Lion One and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Advantage Solutions
The main advantage of trading using opposite Lion One and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Advantage Solutions | Lion One vs. Atlas Corp | Lion One vs. PureCycle Technologies | Lion One vs. WM Technology |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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