Correlation Between Advantage Solutions and Quebec Precious

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

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

Diversification Opportunities for Advantage Solutions and Quebec Precious

-0.1

Correlation Coefficient

Advantage Solutions  Quebec Precious

Good diversification

The 3 months correlation between Advantage and Quebec is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Quebec Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quebec Precious Metals 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 Quebec Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quebec Precious Metals has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Quebec Precious go up and down completely randomly.

Pair Corralation between Advantage Solutions and Quebec Precious

Assuming the 90 days horizon Advantage Solutions is expected to generate 3.59 times more return on investment than Quebec Precious. However, Advantage Solutions is 3.59 times more volatile than Quebec Precious Metals. It trades about 0.1 of its potential returns per unit of risk. Quebec Precious Metals is currently generating about 0.13 per unit of risk. If you would invest  2.89  in Advantage Solutions on September 3, 2024 and sell it today you would earn a total of  0.03  from holding Advantage Solutions or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Advantage Solutions  vs.  Quebec Precious Metals

Advantage Solutions

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Solutions are ranked lower than 7 (%) 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.

Quebec Precious Metals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quebec Precious Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Quebec Precious reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Solutions and Quebec Precious

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

The idea behind Advantage Solutions and Quebec Precious Metals 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.