Correlation Between Snap On and SES SA
Can any of the company-specific risk be diversified away by investing in both Snap On and SES SA 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 SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap On and SES SA, you can compare the effects of market volatilities on Snap On and SES SA 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 SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap On and SES SA.
Diversification Opportunities for Snap On and SES SA
Pay attention - limited upside
The 3 months correlation between Snap and SES is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA 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 SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of Snap On i.e., Snap On and SES SA go up and down completely randomly.
Pair Corralation between Snap On and SES SA
Considering the 90-day investment horizon Snap On is expected to generate 2.31 times less return on investment than SES SA. But when comparing it to its historical volatility, Snap On is 6.31 times less risky than SES SA. It trades about 0.07 of its potential returns per unit of risk. SES SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 721.00 in SES SA on August 24, 2024 and sell it today you would lose (348.00) from holding SES SA or give up 48.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 78.23% |
| Values | Daily Returns |
Snap On vs. SES SA
Performance |
| Timeline |
| Snap On |
| SES SA |
Snap On and SES SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap On and SES SA
The main advantage of trading using opposite Snap On and SES SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap On position performs unexpectedly, SES SA 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 SES SA will offset losses from the drop in SES SA's long position.| Snap On vs. Lincoln Electric Holdings | Snap On vs. Timken Company | Snap On vs. Kennametal | Snap On vs. Toro Co |
| SES SA vs. ITV PLC ADR | SES SA vs. iHeartMedia | SES SA vs. ProSiebenSat1 Media AG | SES SA vs. TV Azteca SAB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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