Correlation Between Advantage Solutions and PureCycle Technologies
Can any of the company-specific risk be diversified away by investing in both Advantage Solutions and PureCycle Technologies 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 PureCycle Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Solutions and PureCycle Technologies, you can compare the effects of market volatilities on Advantage Solutions and PureCycle Technologies 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 PureCycle Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Solutions and PureCycle Technologies.
Diversification Opportunities for Advantage Solutions and PureCycle Technologies
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advantage and PureCycle is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Solutions and PureCycle Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PureCycle Technologies 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 PureCycle Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PureCycle Technologies has no effect on the direction of Advantage Solutions i.e., Advantage Solutions and PureCycle Technologies go up and down completely randomly.
Pair Corralation between Advantage Solutions and PureCycle Technologies
Assuming the 90 days horizon Advantage Solutions is expected to generate 1.83 times more return on investment than PureCycle Technologies. However, Advantage Solutions is 1.83 times more volatile than PureCycle Technologies. It trades about 0.07 of its potential returns per unit of risk. PureCycle Technologies is currently generating about 0.09 per unit of risk. If you would invest 1.12 in Advantage Solutions on June 10, 2025 and sell it today you would lose (0.07) from holding Advantage Solutions or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.94% |
| Values | Daily Returns |
Advantage Solutions vs. PureCycle Technologies
Performance |
| Timeline |
| Advantage Solutions |
| PureCycle Technologies |
Advantage Solutions and PureCycle Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Solutions and PureCycle Technologies
The main advantage of trading using opposite Advantage Solutions and PureCycle Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Solutions position performs unexpectedly, PureCycle Technologies 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 PureCycle Technologies will offset losses from the drop in PureCycle Technologies' long position.| Advantage Solutions vs. Advantage Solutions | Advantage Solutions vs. CuriosityStream | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. Genpact Limited |
| PureCycle Technologies vs. Origin Materials Warrant | PureCycle Technologies vs. Purecycle Technologies Holdings | PureCycle Technologies vs. Energy Recovery | PureCycle Technologies vs. Arq Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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