Correlation Between Snap and Zhejiang Yongjin
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By analyzing existing cross correlation between Snap Inc and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Snap and Zhejiang Yongjin 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 Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Zhejiang Yongjin.
Diversification Opportunities for Snap and Zhejiang Yongjin
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Zhejiang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal 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 Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Snap i.e., Snap and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Snap and Zhejiang Yongjin
Given the investment horizon of 90 days Snap Inc is expected to generate 2.48 times more return on investment than Zhejiang Yongjin. However, Snap is 2.48 times more volatile than Zhejiang Yongjin Metal. It trades about 0.1 of its potential returns per unit of risk. Zhejiang Yongjin Metal is currently generating about -0.19 per unit of risk. If you would invest 1,071 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Zhejiang Yongjin Metal
Performance |
| Timeline |
| Snap Inc |
| Zhejiang Yongjin Metal |
Snap and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Zhejiang Yongjin
The main advantage of trading using opposite Snap and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Zhejiang Yongjin 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 Zhejiang Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.The idea behind Snap Inc and Zhejiang Yongjin Metal 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.| Zhejiang Yongjin vs. Wanhua Chemical Group | Zhejiang Yongjin vs. Shandong Gold Mining | Zhejiang Yongjin vs. Rongsheng Petrochemical Co | Zhejiang Yongjin vs. Inner Mongolia BaoTou |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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