Correlation Between Advantage Solutions and Star Fashion

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

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

Diversification Opportunities for Advantage Solutions and Star Fashion

0.24

Correlation Coefficient

Advantage Solutions  Star Fashion

Modest diversification

The 3 months correlation between Advantage and Star is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and Star Fashion Culture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Fashion Culture 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 Star Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Fashion Culture has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and Star Fashion go up and down completely randomly.

Pair Corralation between Advantage Solutions and Star Fashion

Assuming the 90 days horizon Advantage Solutions is expected to generate 8.28 times more return on investment than Star Fashion. However, Advantage Solutions is 8.28 times more volatile than Star Fashion Culture. It trades about 0.11 of its potential returns per unit of risk. Star Fashion Culture is currently generating about 0.07 per unit of risk. If you would invest  0.94  in Advantage Solutions on September 8, 2025 and sell it today you would lose (0.46) from holding Advantage Solutions or give up 48.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	53.85%
Values	Daily Returns

Advantage Solutions  vs.  Star Fashion Culture

Advantage Solutions

Risk-Adjusted Performance

Fair

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 uncertain basic indicators, Advantage Solutions showed solid returns over the last few months and may actually be approaching a breakup point.

Star Fashion Culture

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Star Fashion Culture are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Star Fashion unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Solutions and Star Fashion

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

The idea behind Advantage Solutions and Star Fashion Culture 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.