Correlation Between Snap and Beijing Wandong
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By analyzing existing cross correlation between Snap Inc and Beijing Wandong Medical, you can compare the effects of market volatilities on Snap and Beijing Wandong 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 Beijing Wandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Beijing Wandong.
Diversification Opportunities for Snap and Beijing Wandong
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Beijing is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Beijing Wandong Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Wandong Medical 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 Beijing Wandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Wandong Medical has no effect on the direction of Snap i.e., Snap and Beijing Wandong go up and down completely randomly.
Pair Corralation between Snap and Beijing Wandong
Given the investment horizon of 90 days Snap Inc is expected to generate 1.73 times more return on investment than Beijing Wandong. However, Snap is 1.73 times more volatile than Beijing Wandong Medical. It trades about 0.03 of its potential returns per unit of risk. Beijing Wandong Medical is currently generating about 0.0 per unit of risk. If you would invest 1,046 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 115.00 from holding Snap Inc or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.19% |
| Values | Daily Returns |
Snap Inc vs. Beijing Wandong Medical
Performance |
| Timeline |
| Snap Inc |
| Beijing Wandong Medical |
Snap and Beijing Wandong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Beijing Wandong
The main advantage of trading using opposite Snap and Beijing Wandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Beijing Wandong 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 Beijing Wandong will offset losses from the drop in Beijing Wandong's long position.The idea behind Snap Inc and Beijing Wandong Medical 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.| Beijing Wandong vs. Sunwave Communications Co | Beijing Wandong vs. Hubei Xingfa Chemicals | Beijing Wandong vs. Shandong Polymer Biochemicals | Beijing Wandong vs. 360 Security Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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