Correlation Between American Picture and SNM Gobal
Can any of the company-specific risk be diversified away by investing in both American Picture and SNM Gobal 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 American Picture and SNM Gobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Picture House and SNM Gobal Holdings, you can compare the effects of market volatilities on American Picture and SNM Gobal 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 American Picture with a short position of SNM Gobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Picture and SNM Gobal.
Diversification Opportunities for American Picture and SNM Gobal
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between American and SNM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding American Picture House and SNM Gobal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNM Gobal Holdings and American Picture 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 American Picture House are associated (or correlated) with SNM Gobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNM Gobal Holdings has no effect on the direction of American Picture i.e., American Picture and SNM Gobal go up and down completely randomly.
Pair Corralation between American Picture and SNM Gobal
Given the investment horizon of 90 days American Picture is expected to generate 139.86 times less return on investment than SNM Gobal. But when comparing it to its historical volatility, American Picture House is 24.68 times less risky than SNM Gobal. It trades about 0.04 of its potential returns per unit of risk. SNM Gobal Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.02 in SNM Gobal Holdings on November 9, 2024 and sell it today you would lose (0.01) from holding SNM Gobal Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.87% |
| Values | Daily Returns |
American Picture House vs. SNM Gobal Holdings
Performance |
| Timeline |
| American Picture House |
| SNM Gobal Holdings |
American Picture and SNM Gobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Picture and SNM Gobal
The main advantage of trading using opposite American Picture and SNM Gobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Picture position performs unexpectedly, SNM Gobal 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 SNM Gobal will offset losses from the drop in SNM Gobal's long position.| American Picture vs. Netflix | American Picture vs. Walt Disney | American Picture vs. Roku Inc | American Picture vs. Paramount Global Class |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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