Correlation Between Snap and Guosheng Financial
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By analyzing existing cross correlation between Snap Inc and Guosheng Financial Holding, you can compare the effects of market volatilities on Snap and Guosheng Financial 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 Guosheng Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Guosheng Financial.
Diversification Opportunities for Snap and Guosheng Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Guosheng is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Guosheng Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guosheng Financial 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 Guosheng Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guosheng Financial has no effect on the direction of Snap i.e., Snap and Guosheng Financial go up and down completely randomly.
Pair Corralation between Snap and Guosheng Financial
Given the investment horizon of 90 days Snap Inc is expected to generate 1.53 times more return on investment than Guosheng Financial. However, Snap is 1.53 times more volatile than Guosheng Financial Holding. It trades about 0.1 of its potential returns per unit of risk. Guosheng Financial Holding is currently generating about -0.07 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 Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Snap Inc vs. Guosheng Financial Holding
Performance |
| Timeline |
| Snap Inc |
| Guosheng Financial |
Snap and Guosheng Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Guosheng Financial
The main advantage of trading using opposite Snap and Guosheng Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Guosheng Financial 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 Guosheng Financial will offset losses from the drop in Guosheng Financial's long position.The idea behind Snap Inc and Guosheng Financial Holding 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.| Guosheng Financial vs. PetroChina Co Ltd | Guosheng Financial vs. China State Construction | Guosheng Financial vs. China Mobile Limited | Guosheng Financial vs. Industrial and Commercial |
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 Positions Ratings module to 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.
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