Correlation Between Snap and Chongqing Landai
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By analyzing existing cross correlation between Snap Inc and Chongqing Landai Powertrain, you can compare the effects of market volatilities on Snap and Chongqing Landai 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 Chongqing Landai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Chongqing Landai.
Diversification Opportunities for Snap and Chongqing Landai
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Chongqing is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Chongqing Landai Powertrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Landai Pow 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 Chongqing Landai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Landai Pow has no effect on the direction of Snap i.e., Snap and Chongqing Landai go up and down completely randomly.
Pair Corralation between Snap and Chongqing Landai
Given the investment horizon of 90 days Snap is expected to generate 4.51 times less return on investment than Chongqing Landai. But when comparing it to its historical volatility, Snap Inc is 1.52 times less risky than Chongqing Landai. It trades about 0.09 of its potential returns per unit of risk. Chongqing Landai Powertrain is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 624.00 in Chongqing Landai Powertrain on August 27, 2024 and sell it today you would earn a total of 245.00 from holding Chongqing Landai Powertrain or generate 39.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Chongqing Landai Powertrain
Performance |
| Timeline |
| Snap Inc |
| Chongqing Landai Pow |
Snap and Chongqing Landai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Chongqing Landai
The main advantage of trading using opposite Snap and Chongqing Landai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Chongqing Landai 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 Chongqing Landai will offset losses from the drop in Chongqing Landai's long position.The idea behind Snap Inc and Chongqing Landai Powertrain 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.| Chongqing Landai vs. Rising Nonferrous Metals | Chongqing Landai vs. Shengda Mining Co | Chongqing Landai vs. Guocheng Mining Co | Chongqing Landai vs. CITIC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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