Correlation Between Snap and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Snap and Golden Bridge 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 Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Golden Bridge Investment, you can compare the effects of market volatilities on Snap and Golden Bridge 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 Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Golden Bridge.
Diversification Opportunities for Snap and Golden Bridge
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and Golden is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment 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 Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Snap i.e., Snap and Golden Bridge go up and down completely randomly.
Pair Corralation between Snap and Golden Bridge
Given the investment horizon of 90 days Snap Inc is expected to generate 3.02 times more return on investment than Golden Bridge. However, Snap is 3.02 times more volatile than Golden Bridge Investment. It trades about 0.1 of its potential returns per unit of risk. Golden Bridge Investment 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. Golden Bridge Investment
Performance |
| Timeline |
| Snap Inc |
| Golden Bridge Investment |
Snap and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Golden Bridge
The main advantage of trading using opposite Snap and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.The idea behind Snap Inc and Golden Bridge Investment 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.| Golden Bridge vs. LB Investment | Golden Bridge vs. Samyang Foods Co | Golden Bridge vs. Dongwon Metal Co | Golden Bridge vs. Daiyang Metal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |