Correlation Between Snap On and QEP
Can any of the company-specific risk be diversified away by investing in both Snap On and QEP 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 Snap On and QEP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and QEP Co Inc, you can compare the effects of market volatilities on Snap On and QEP 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 Snap On with a short position of QEP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and QEP.
Diversification Opportunities for Snap On and QEP
Very good diversification
The 3 months correlation between Snap and QEP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and QEP Co Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QEP Co Inc and Snap On 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 Snap On are associated (or correlated) with QEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QEP Co Inc has no effect on the direction of Snap On i.e., Snap On and QEP go up and down completely randomly.
Pair Corralation between Snap On and QEP
If you would invest 33,060 in Snap On on August 28, 2024 and sell it today you would earn a total of 4,004 from holding Snap On or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Snap On vs. QEP Co Inc
Performance |
| Timeline |
| Snap On |
| QEP Co Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Snap On and QEP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and QEP
The main advantage of trading using opposite Snap On and QEP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On position performs unexpectedly, QEP 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 QEP will offset losses from the drop in QEP's long position.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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