Correlation Between Snap and An Phat
Can any of the company-specific risk be diversified away by investing in both Snap and An Phat 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 An Phat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and An Phat Plastic, you can compare the effects of market volatilities on Snap and An Phat 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 An Phat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and An Phat.
Diversification Opportunities for Snap and An Phat
Pay attention - limited upside
The 3 months correlation between Snap and AAA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and An Phat Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Phat Plastic 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 An Phat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Phat Plastic has no effect on the direction of Snap i.e., Snap and An Phat go up and down completely randomly.
Pair Corralation between Snap and An Phat
Given the investment horizon of 90 days Snap Inc is expected to generate 2.6 times more return on investment than An Phat. However, Snap is 2.6 times more volatile than An Phat Plastic. It trades about 0.1 of its potential returns per unit of risk. An Phat Plastic is currently generating about -0.1 per unit of risk. If you would invest 1,071 in Snap Inc on August 28, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. An Phat Plastic
Performance |
| Timeline |
| Snap Inc |
| An Phat Plastic |
Snap and An Phat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and An Phat
The main advantage of trading using opposite Snap and An Phat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, An Phat 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 An Phat will offset losses from the drop in An Phat's long position.The idea behind Snap Inc and An Phat Plastic 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.| An Phat vs. FIT INVEST JSC | An Phat vs. Damsan JSC | An Phat vs. APG Securities Joint | An Phat vs. Binhthuan Agriculture Services |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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