Correlation Between Advantage Solutions and Silver Spruce
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and Silver Spruce 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 Silver Spruce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and Silver Spruce Resources, you can compare the effects of market volatilities on Advantage Solutions and Silver Spruce 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 Silver Spruce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Silver Spruce.
Diversification Opportunities for Advantage Solutions and Silver Spruce
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advantage and Silver is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Silver Spruce Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spruce Resources 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 Silver Spruce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spruce Resources has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Silver Spruce go up and down completely randomly.
Pair Corralation between Advantage Solutions and Silver Spruce
Assuming the 90 days horizon Advantage Solutions is expected to generate 1.86 times more return on investment than Silver Spruce. However, Advantage Solutions is 1.86 times more volatile than Silver Spruce Resources. It trades about 0.07 of its potential returns per unit of risk. Silver Spruce Resources is currently generating about -0.03 per unit of risk. If you would invest 2.50 in Advantage Solutions on September 13, 2024 and sell it today you would lose (0.71) from holding Advantage Solutions or give up 28.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Advantage Solutions vs. Silver Spruce Resources
Performance |
Timeline |
Advantage Solutions |
Silver Spruce Resources |
Advantage Solutions and Silver Spruce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advantage Solutions and Silver Spruce
The main advantage of trading using opposite Advantage Solutions and Silver Spruce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, Silver Spruce 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 Silver Spruce will offset losses from the drop in Silver Spruce's long position.Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream | Advantage Solutions vs. Aquagold International |
Silver Spruce vs. Advantage Solutions | Silver Spruce vs. Atlas Corp | Silver Spruce vs. PureCycle Technologies | Silver Spruce vs. WM Technology |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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