Correlation Between Advantage Solutions and Stans Energy

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

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

Diversification Opportunities for Advantage Solutions and Stans Energy

-0.14

Correlation Coefficient

Advantage Solutions  Stans Energy

Good diversification

The 3 months correlation between Advantage and Stans is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Stans Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stans Energy Corp 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 Stans Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stans Energy Corp has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Stans Energy go up and down completely randomly.

Pair Corralation between Advantage Solutions and Stans Energy

Assuming the 90 days horizon Advantage Solutions is expected to generate 0.82 times more return on investment than Stans Energy. However, Advantage Solutions is 1.22 times less risky than Stans Energy. It trades about 0.06 of its potential returns per unit of risk. Stans Energy Corp is currently generating about -0.03 per unit of risk. If you would invest  1.27  in Advantage Solutions on December 30, 2024 and sell it today you would lose (0.07) from holding Advantage Solutions or give up 5.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Advantage Solutions  vs.  Stans Energy Corp

Advantage Solutions

Risk-Adjusted Performance

Insignificant

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.

Stans Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stans Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Advantage Solutions and Stans Energy

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

The idea behind Advantage Solutions and Stans Energy Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.