Correlation Between Metallis Resources and Advantage Solutions

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Can any of the company-specific risk be diversified away by investing in both Metallis Resources 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 Metallis Resources and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metallis Resources and Advantage Solutions, you can compare the effects of market volatilities on Metallis Resources 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 Metallis Resources with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metallis Resources and Advantage Solutions.

Diversification Opportunities for Metallis Resources and Advantage Solutions

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Metallis and Advantage is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Metallis Resources and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Metallis Resources 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 Metallis Resources 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 Metallis Resources i.e., Metallis Resources and Advantage Solutions go up and down completely randomly.

Pair Corralation between Metallis Resources and Advantage Solutions

Assuming the 90 days horizon Metallis Resources is expected to generate 0.46 times more return on investment than Advantage Solutions. However, Metallis Resources is 2.17 times less risky than Advantage Solutions. It trades about 0.34 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.04 per unit of risk. If you would invest  14.00  in Metallis Resources on September 12, 2024 and sell it today you would earn a total of  6.00  from holding Metallis Resources or generate 42.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Metallis Resources  vs.  Advantage Solutions

 Performance 
       Timeline  
Metallis Resources 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Metallis Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Metallis Resources reported solid returns over the last few months and may actually be approaching a breakup point.
Advantage Solutions 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Advantage Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Metallis Resources and Advantage Solutions Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Metallis Resources and Advantage Solutions

The main advantage of trading using opposite Metallis Resources and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metallis Resources 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 Metallis Resources 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.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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