Correlation Between Snap and Sam Chun
Can any of the company-specific risk be diversified away by investing in both Snap and Sam Chun 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 and Sam Chun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Sam Chun Dang, you can compare the effects of market volatilities on Snap and Sam Chun 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 Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Sam Chun.
Diversification Opportunities for Snap and Sam Chun
Very good diversification
The 3 months correlation between Snap and Sam is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang 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 Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Snap i.e., Snap and Sam Chun go up and down completely randomly.
Pair Corralation between Snap and Sam Chun
Given the investment horizon of 90 days Snap Inc is expected to generate 1.1 times more return on investment than Sam Chun. However, Snap is 1.1 times more volatile than Sam Chun Dang. It trades about 0.1 of its potential returns per unit of risk. Sam Chun Dang is currently generating about -0.23 per unit of risk. If you would invest 1,071 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Sam Chun Dang
Performance |
| Timeline |
| Snap Inc |
| Sam Chun Dang |
Snap and Sam Chun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Sam Chun
The main advantage of trading using opposite Snap and Sam Chun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Sam Chun 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 Sam Chun will offset losses from the drop in Sam Chun's long position.The idea behind Snap Inc and Sam Chun Dang 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.| Sam Chun vs. Medy Tox | Sam Chun vs. Busan Industrial Co | Sam Chun vs. Busan Ind | Sam Chun vs. Mirae Asset Daewoo |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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