Correlation Between Keweenaw Land and Advantage Solutions

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

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

Diversification Opportunities for Keweenaw Land and Advantage Solutions

0.19

Correlation Coefficient

Keweenaw Land  Advantage Solutions

Average diversification

The 3 months correlation between Keweenaw and Advantage is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Keweenaw Land Association and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Keweenaw Land 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 Keweenaw Land Association 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 Keweenaw Land i.e., Keweenaw Land and Advantage Solutions go up and down completely randomly.

Pair Corralation between Keweenaw Land and Advantage Solutions

Given the investment horizon of 90 days Keweenaw Land Association is expected to generate 0.37 times more return on investment than Advantage Solutions. However, Keweenaw Land Association is 2.68 times less risky than Advantage Solutions. It trades about 0.0 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.12 per unit of risk. If you would invest  3,500  in Keweenaw Land Association on September 13, 2024 and sell it today you would lose (55.00) from holding Keweenaw Land Association or give up 1.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Keweenaw Land Association  vs.  Advantage Solutions

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Advantage Solutions

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Solutions are ranked lower than 4 (%) 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.

Pair Trading with Keweenaw Land and Advantage Solutions

The main advantage of trading using opposite Keweenaw Land and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keweenaw Land 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 Keweenaw Land Association 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.