Correlation Between Advantage Solutions and Benton Resources

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

By analyzing existing cross correlation between Advantage Solutions and Benton Resources, you can compare the effects of market volatilities on Advantage Solutions and Benton Resources 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 Benton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and Benton Resources.

Diversification Opportunities for Advantage Solutions and Benton Resources

0.24

Correlation Coefficient

Advantage Solutions  Benton Resources

Modest diversification

The 3 months correlation between Advantage and Benton is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Benton Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benton 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 Benton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benton Resources has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Benton Resources go up and down completely randomly.

Pair Corralation between Advantage Solutions and Benton Resources

Assuming the 90 days horizon Advantage Solutions is expected to under-perform the Benton Resources. In addition to that, Advantage Solutions is 1.02 times more volatile than Benton Resources. It trades about -0.18 of its total potential returns per unit of risk. Benton Resources is currently generating about 0.16 per unit of volatility. If you would invest  3.80  in Benton Resources on October 7, 2024 and sell it today you would earn a total of  1.02  from holding Benton Resources or generate 26.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advantage Solutions  vs.  Benton Resources

Advantage Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advantage Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Benton Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Benton Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Benton Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Solutions and Benton Resources

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

The idea behind Advantage Solutions and Benton Resources 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.