Correlation Between Mason Graphite and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Mason Graphite 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 Mason Graphite and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mason Graphite and Advantage Solutions, you can compare the effects of market volatilities on Mason Graphite 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 Mason Graphite with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mason Graphite and Advantage Solutions.
Diversification Opportunities for Mason Graphite and Advantage Solutions
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mason and Advantage is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Mason Graphite 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 Mason Graphite 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 Mason Graphite i.e., Mason Graphite and Advantage Solutions go up and down completely randomly.
Pair Corralation between Mason Graphite and Advantage Solutions
Assuming the 90 days horizon Mason Graphite is expected to under-perform the Advantage Solutions. But the otc stock apears to be less risky and, when comparing its historical volatility, Mason Graphite is 2.04 times less risky than Advantage Solutions. The otc stock trades about -0.27 of its potential returns per unit of risk. The Advantage Solutions is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2.30 in Advantage Solutions on September 12, 2024 and sell it today you would lose (0.50) from holding Advantage Solutions or give up 21.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Mason Graphite vs. Advantage Solutions
Performance |
| Timeline |
| Mason Graphite |
| Advantage Solutions |
Mason Graphite and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mason Graphite and Advantage Solutions
The main advantage of trading using opposite Mason Graphite and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mason Graphite 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.| Mason Graphite vs. Advantage Solutions | Mason Graphite vs. Atlas Corp | Mason Graphite vs. PureCycle Technologies | Mason Graphite 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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