Correlation Between Snap and DecideAct
Can any of the company-specific risk be diversified away by investing in both Snap and DecideAct 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 DecideAct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and DecideAct AS, you can compare the effects of market volatilities on Snap and DecideAct 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 DecideAct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and DecideAct.
Diversification Opportunities for Snap and DecideAct
Pay attention - limited upside
The 3 months correlation between Snap and DecideAct is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and DecideAct AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DecideAct AS 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 DecideAct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DecideAct AS has no effect on the direction of Snap i.e., Snap and DecideAct go up and down completely randomly.
Pair Corralation between Snap and DecideAct
Given the investment horizon of 90 days Snap Inc is expected to under-perform the DecideAct. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 2.68 times less risky than DecideAct. The stock trades about -0.03 of its potential returns per unit of risk. The DecideAct AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 178.00 in DecideAct AS on September 1, 2024 and sell it today you would earn a total of 4.00 from holding DecideAct AS or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Snap Inc vs. DecideAct AS
Performance |
| Timeline |
| Snap Inc |
| DecideAct AS |
Snap and DecideAct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and DecideAct
The main advantage of trading using opposite Snap and DecideAct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, DecideAct 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 DecideAct will offset losses from the drop in DecideAct's long position.The idea behind Snap Inc and DecideAct AS 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.| DecideAct vs. FOM Technologies AS | DecideAct vs. cBrain AS | DecideAct vs. Green Hydrogen Systems | DecideAct vs. BioPorto |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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