Correlation Between Snap and Accor S
Can any of the company-specific risk be diversified away by investing in both Snap and Accor S 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 Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Accor S A, you can compare the effects of market volatilities on Snap and Accor S 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 Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Accor S.
Diversification Opportunities for Snap and Accor S
Poor diversification
The 3 months correlation between Snap and Accor is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A 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 Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Snap i.e., Snap and Accor S go up and down completely randomly.
Pair Corralation between Snap and Accor S
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Accor S. In addition to that, Snap is 2.18 times more volatile than Accor S A. It trades about -0.03 of its total potential returns per unit of risk. Accor S A is currently generating about 0.15 per unit of volatility. If you would invest 4,166 in Accor S A on September 1, 2024 and sell it today you would earn a total of 202.00 from holding Accor S A or generate 4.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 91.3% |
Values | Daily Returns |
Snap Inc vs. Accor S A
Performance |
Timeline |
Snap Inc |
Accor S A |
Snap and Accor S Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Snap and Accor S
The main advantage of trading using opposite Snap and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.The idea behind Snap Inc and Accor S A 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.Accor S vs. Les Hotels Bav | Accor S vs. Groupe Partouche SA | Accor S vs. Centrale dAchat Franaise | Accor S vs. Manitou BF SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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