Correlation Between Advantage Solutions and Orosur Mining

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

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

Diversification Opportunities for Advantage Solutions and Orosur Mining

-0.75

Correlation Coefficient

Advantage Solutions  Orosur Mining

Pay attention - limited upside

The 3 months correlation between Advantage and Orosur is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Orosur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orosur Mining 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 Orosur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orosur Mining has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Orosur Mining go up and down completely randomly.

Pair Corralation between Advantage Solutions and Orosur Mining

Assuming the 90 days horizon Advantage Solutions is expected to under-perform the Orosur Mining. But the stock apears to be less risky and, when comparing its historical volatility, Advantage Solutions is 1.11 times less risky than Orosur Mining. The stock trades about -0.18 of its potential returns per unit of risk. The Orosur Mining is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7.60  in Orosur Mining on October 7, 2024 and sell it today you would earn a total of  3.40  from holding Orosur Mining or generate 44.74% return on investment over 90 days.

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

Advantage Solutions  vs.  Orosur Mining

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.

Orosur Mining

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orosur Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Orosur Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Solutions and Orosur Mining

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

The idea behind Advantage Solutions and Orosur Mining 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.