Correlation Between Snap On and LS Starrett
Can any of the company-specific risk be diversified away by investing in both Snap On and LS Starrett 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 LS Starrett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and LS Starrett, you can compare the effects of market volatilities on Snap On and LS Starrett 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 LS Starrett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and LS Starrett.
Diversification Opportunities for Snap On and LS Starrett
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and SCX is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and LS Starrett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS Starrett 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 LS Starrett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Starrett has no effect on the direction of Snap On i.e., Snap On and LS Starrett go up and down completely randomly.
Pair Corralation between Snap On and LS Starrett
If you would invest 32,524 in Snap On on August 24, 2024 and sell it today you would earn a total of 3,616 from holding Snap On or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Snap On vs. LS Starrett
Performance |
| Timeline |
| Snap On |
| LS Starrett |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Snap On and LS Starrett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and LS Starrett
The main advantage of trading using opposite Snap On and LS Starrett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On position performs unexpectedly, LS Starrett 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 LS Starrett will offset losses from the drop in LS Starrett's long position.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
| LS Starrett vs. Eastern Co | LS Starrett vs. Timken Company | LS Starrett vs. Lincoln Electric Holdings | LS Starrett vs. Hillman Solutions Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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