Correlation Between Snap and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Snap and Cengild Medical 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 Cengild Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Cengild Medical Berhad, you can compare the effects of market volatilities on Snap and Cengild Medical 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 Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Cengild Medical.
Diversification Opportunities for Snap and Cengild Medical
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and Cengild is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad 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 Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Snap i.e., Snap and Cengild Medical go up and down completely randomly.
Pair Corralation between Snap and Cengild Medical
Given the investment horizon of 90 days Snap Inc is expected to generate 1.73 times more return on investment than Cengild Medical. However, Snap is 1.73 times more volatile than Cengild Medical Berhad. It trades about 0.03 of its potential returns per unit of risk. Cengild Medical Berhad is currently generating about -0.04 per unit of risk. If you would invest 922.00 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 238.00 from holding Snap Inc or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.27% |
| Values | Daily Returns |
Snap Inc vs. Cengild Medical Berhad
Performance |
| Timeline |
| Snap Inc |
| Cengild Medical Berhad |
Snap and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Cengild Medical
The main advantage of trading using opposite Snap and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.The idea behind Snap Inc and Cengild Medical Berhad 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.| Cengild Medical vs. Malayan Banking Bhd | Cengild Medical vs. Public Bank Bhd | Cengild Medical vs. Petronas Chemicals Group | Cengild Medical vs. Tenaga Nasional Bhd |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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