Correlation Between Advantage Solutions and Keweenaw Land

Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Keweenaw Land 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 Advantage Solutions and Keweenaw Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advantage Solutions and Keweenaw Land Association, you can compare the effects of market volatilities on Advantage Solutions and Keweenaw Land 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 Advantage Solutions with a short position of Keweenaw Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Keweenaw Land.

Diversification Opportunities for Advantage Solutions and Keweenaw Land

0.19

Correlation Coefficient

Advantage Solutions  Keweenaw Land

Average diversification

The 3 months correlation between Advantage and Keweenaw is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Keweenaw Land Association in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Land Association and Advantage Solutions 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 Advantage Solutions are associated (or correlated) with Keweenaw Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Land Association has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Keweenaw Land go up and down completely randomly.

Pair Corralation between Advantage Solutions and Keweenaw Land

Assuming the 90 days horizon Advantage Solutions is expected to generate 4.65 times more return on investment than Keweenaw Land. However, Advantage Solutions is 4.65 times more volatile than Keweenaw Land Association. It trades about 0.06 of its potential returns per unit of risk. Keweenaw Land Association is currently generating about 0.05 per unit of risk. If you would invest  10.00  in Advantage Solutions on September 14, 2024 and sell it today you would lose (8.21) from holding Advantage Solutions or give up 82.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	75.1%
Values	Daily Returns

Advantage Solutions  vs.  Keweenaw Land Association

Advantage Solutions

Risk-Adjusted Performance

5 of 100

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.

Keweenaw Land Association

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keweenaw Land Association has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Keweenaw Land is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Advantage Solutions and Keweenaw Land

The main advantage of trading using opposite Advantage Solutions and Keweenaw Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Keweenaw Land 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 Keweenaw Land will offset losses from the drop in Keweenaw Land's long position.

The idea behind Advantage Solutions and Keweenaw Land Association 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.