Correlation Between Advantage Solutions and Comcast Corp

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

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

Diversification Opportunities for Advantage Solutions and Comcast Corp

-0.6

Correlation Coefficient

Advantage Solutions  Comcast Corp

Excellent diversification

The 3 months correlation between Advantage and Comcast is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Comcast Corp go up and down completely randomly.

Pair Corralation between Advantage Solutions and Comcast Corp

Considering the 90-day investment horizon Advantage Solutions is expected to generate 1.82 times less return on investment than Comcast Corp. In addition to that, Advantage Solutions is 2.56 times more volatile than Comcast Corp. It trades about 0.02 of its total potential returns per unit of risk. Comcast Corp is currently generating about 0.08 per unit of volatility. If you would invest  3,876  in Comcast Corp on August 14, 2024 and sell it today you would earn a total of  528.00  from holding Comcast Corp or generate 13.62% 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.  Comcast Corp

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 fairly stable fundamental indicators, Advantage Solutions is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Comcast Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Comcast Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Comcast Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Solutions and Comcast Corp

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

The idea behind Advantage Solutions and Comcast 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.