Correlation Between Nuinsco Resources and Advantage Solutions

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

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

Diversification Opportunities for Nuinsco Resources and Advantage Solutions

0.03

Correlation Coefficient

Nuinsco Resources  Advantage Solutions

Significant diversification

The 3 months correlation between Nuinsco and Advantage is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nuinsco Resources Limited and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Nuinsco Resources 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 Nuinsco Resources Limited 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 Nuinsco Resources i.e., Nuinsco Resources and Advantage Solutions go up and down completely randomly.

Pair Corralation between Nuinsco Resources and Advantage Solutions

Assuming the 90 days horizon Nuinsco Resources is expected to generate 1.14 times less return on investment than Advantage Solutions. In addition to that, Nuinsco Resources is 1.24 times more volatile than Advantage Solutions. It trades about 0.05 of its total potential returns per unit of risk. Advantage Solutions is currently generating about 0.07 per unit of volatility. If you would invest  2.89  in Advantage Solutions on September 5, 2024 and sell it today you would lose (0.90) from holding Advantage Solutions or give up 31.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

Nuinsco Resources Limited  vs.  Advantage Solutions

Nuinsco Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuinsco Resources Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Nuinsco Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Advantage Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Solutions are ranked lower than 5 (%) 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 Nuinsco Resources and Advantage Solutions

The main advantage of trading using opposite Nuinsco Resources and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuinsco Resources 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 Nuinsco Resources Limited 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.