Correlation Between Snap and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Snap and JC Chemical 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 JC Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and JC Chemical Co, you can compare the effects of market volatilities on Snap and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and JC Chemical.
Diversification Opportunities for Snap and JC Chemical
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and 137950 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Snap i.e., Snap and JC Chemical go up and down completely randomly.
Pair Corralation between Snap and JC Chemical
Given the investment horizon of 90 days Snap Inc is expected to generate 1.17 times more return on investment than JC Chemical. However, Snap is 1.17 times more volatile than JC Chemical Co. It trades about 0.07 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.14 per unit of risk. If you would invest 1,070 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Snap Inc or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Snap Inc vs. JC Chemical Co
Performance |
| Timeline |
| Snap Inc |
| JC Chemical |
Snap and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and JC Chemical
The main advantage of trading using opposite Snap and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.The idea behind Snap Inc and JC Chemical Co 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.| JC Chemical vs. Korea New Network | JC Chemical vs. Dong A Eltek | JC Chemical vs. Dreamus Company | JC Chemical vs. SK Bioscience 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |