Correlation Between Snap and Aptamer Sciences
Can any of the company-specific risk be diversified away by investing in both Snap and Aptamer Sciences 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 Aptamer Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Aptamer Sciences, you can compare the effects of market volatilities on Snap and Aptamer Sciences 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 Aptamer Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Aptamer Sciences.
Diversification Opportunities for Snap and Aptamer Sciences
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Aptamer is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Aptamer Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptamer Sciences 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 Aptamer Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptamer Sciences has no effect on the direction of Snap i.e., Snap and Aptamer Sciences go up and down completely randomly.
Pair Corralation between Snap and Aptamer Sciences
Given the investment horizon of 90 days Snap is expected to generate 1.08 times less return on investment than Aptamer Sciences. But when comparing it to its historical volatility, Snap Inc is 2.34 times less risky than Aptamer Sciences. It trades about 0.06 of its potential returns per unit of risk. Aptamer Sciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 185,533 in Aptamer Sciences on August 25, 2024 and sell it today you would lose (3,933) from holding Aptamer Sciences or give up 2.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.33% |
| Values | Daily Returns |
Snap Inc vs. Aptamer Sciences
Performance |
| Timeline |
| Snap Inc |
| Aptamer Sciences |
Snap and Aptamer Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Aptamer Sciences
The main advantage of trading using opposite Snap and Aptamer Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Aptamer Sciences 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 Aptamer Sciences will offset losses from the drop in Aptamer Sciences' long position.The idea behind Snap Inc and Aptamer Sciences 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.| Aptamer Sciences vs. Samsung Electronics Co | Aptamer Sciences vs. Samsung Electronics Co | Aptamer Sciences vs. LG Energy Solution | Aptamer Sciences vs. SK Hynix |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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