Correlation Between Snap and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Snap and Shinhan Inverse 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 Shinhan Inverse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Shinhan Inverse Copper, you can compare the effects of market volatilities on Snap and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Shinhan Inverse.
Diversification Opportunities for Snap and Shinhan Inverse
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Shinhan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Shinhan Inverse Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Copper 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Copper has no effect on the direction of Snap i.e., Snap and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Snap and Shinhan Inverse
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Shinhan Inverse. In addition to that, Snap is 2.16 times more volatile than Shinhan Inverse Copper. It trades about -0.03 of its total potential returns per unit of risk. Shinhan Inverse Copper is currently generating about 0.22 per unit of volatility. If you would invest 532,000 in Shinhan Inverse Copper on September 1, 2024 and sell it today you would earn a total of 33,000 from holding Shinhan Inverse Copper or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Snap Inc vs. Shinhan Inverse Copper
Performance |
| Timeline |
| Snap Inc |
| Shinhan Inverse Copper |
Snap and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Shinhan Inverse
The main advantage of trading using opposite Snap and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.The idea behind Snap Inc and Shinhan Inverse Copper 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.| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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