Correlation Between Snap and Jiangsu Xinning
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By analyzing existing cross correlation between Snap Inc and Jiangsu Xinning Modern, you can compare the effects of market volatilities on Snap and Jiangsu Xinning 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 Jiangsu Xinning. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Jiangsu Xinning.
Diversification Opportunities for Snap and Jiangsu Xinning
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Jiangsu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Jiangsu Xinning Modern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Xinning Modern 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 Jiangsu Xinning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Xinning Modern has no effect on the direction of Snap i.e., Snap and Jiangsu Xinning go up and down completely randomly.
Pair Corralation between Snap and Jiangsu Xinning
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Jiangsu Xinning. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 1.2 times less risky than Jiangsu Xinning. The stock trades about -0.01 of its potential returns per unit of risk. The Jiangsu Xinning Modern is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Jiangsu Xinning Modern on August 25, 2024 and sell it today you would lose (5.00) from holding Jiangsu Xinning Modern or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.76% |
| Values | Daily Returns |
Snap Inc vs. Jiangsu Xinning Modern
Performance |
| Timeline |
| Snap Inc |
| Jiangsu Xinning Modern |
Snap and Jiangsu Xinning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Jiangsu Xinning
The main advantage of trading using opposite Snap and Jiangsu Xinning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Jiangsu Xinning 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 Jiangsu Xinning will offset losses from the drop in Jiangsu Xinning's long position.The idea behind Snap Inc and Jiangsu Xinning Modern 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.| Jiangsu Xinning vs. Sportsoul Co Ltd | Jiangsu Xinning vs. Chengdu Spaceon Electronics | Jiangsu Xinning vs. Shandong Longquan Pipeline | Jiangsu Xinning vs. Shanghai CEO Environmental |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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