Correlation Between Snap and North Huajin
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By analyzing existing cross correlation between Snap Inc and North Huajin Chemical, you can compare the effects of market volatilities on Snap and North Huajin 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 with a short position of North Huajin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and North Huajin.
Diversification Opportunities for Snap and North Huajin
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and North is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and North Huajin Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Huajin Chemical and Snap 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 Inc are associated (or correlated) with North Huajin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Huajin Chemical has no effect on the direction of Snap i.e., Snap and North Huajin go up and down completely randomly.
Pair Corralation between Snap and North Huajin
Given the investment horizon of 90 days Snap is expected to generate 2.51 times less return on investment than North Huajin. But when comparing it to its historical volatility, Snap Inc is 1.16 times less risky than North Huajin. It trades about 0.06 of its potential returns per unit of risk. North Huajin Chemical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 441.00 in North Huajin Chemical on August 28, 2024 and sell it today you would earn a total of 82.00 from holding North Huajin Chemical or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.37% |
| Values | Daily Returns |
Snap Inc vs. North Huajin Chemical
Performance |
| Timeline |
| Snap Inc |
| North Huajin Chemical |
Snap and North Huajin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and North Huajin
The main advantage of trading using opposite Snap and North Huajin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, North Huajin 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 North Huajin will offset losses from the drop in North Huajin's long position.The idea behind Snap Inc and North Huajin Chemical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| North Huajin vs. Zijin Mining Group | North Huajin vs. Wanhua Chemical Group | North Huajin vs. Baoshan Iron Steel | North Huajin vs. Shandong Gold Mining |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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