Correlation Between Haier Smart and Snap
Can any of the company-specific risk be diversified away by investing in both Haier Smart and Snap 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 Haier Smart and Snap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haier Smart Home and Snap Inc, you can compare the effects of market volatilities on Haier Smart and Snap 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 Haier Smart with a short position of Snap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haier Smart and Snap.
Diversification Opportunities for Haier Smart and Snap
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Haier and Snap is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Haier Smart Home and Snap Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap Inc and Haier Smart 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 Haier Smart Home are associated (or correlated) with Snap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap Inc has no effect on the direction of Haier Smart i.e., Haier Smart and Snap go up and down completely randomly.
Pair Corralation between Haier Smart and Snap
Assuming the 90 days trading horizon Haier Smart is expected to generate 18.01 times less return on investment than Snap. But when comparing it to its historical volatility, Haier Smart Home is 1.56 times less risky than Snap. It trades about 0.01 of its potential returns per unit of risk. Snap Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,103 in Snap Inc on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Snap Inc or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Haier Smart Home vs. Snap Inc
Performance |
| Timeline |
| Haier Smart Home |
| Snap Inc |
Haier Smart and Snap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haier Smart and Snap
The main advantage of trading using opposite Haier Smart and Snap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haier Smart position performs unexpectedly, Snap 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 Snap will offset losses from the drop in Snap's long position.| Haier Smart vs. GEAR4MUSIC LS 10 | Haier Smart vs. Grupo Carso SAB | Haier Smart vs. CVR Medical Corp | Haier Smart vs. Cars Inc |
| Snap vs. INVITATION HOMES DL | Snap vs. Focus Home Interactive | Snap vs. Autohome ADR | Snap vs. Haier Smart Home |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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