Correlation Between Snap and Alpha Bank
Can any of the company-specific risk be diversified away by investing in both Snap and Alpha Bank 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 Alpha Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Alpha Bank SA, you can compare the effects of market volatilities on Snap and Alpha Bank 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 Alpha Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Alpha Bank.
Diversification Opportunities for Snap and Alpha Bank
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and Alpha is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Alpha Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Bank SA 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 Alpha Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Bank SA has no effect on the direction of Snap i.e., Snap and Alpha Bank go up and down completely randomly.
Pair Corralation between Snap and Alpha Bank
Given the investment horizon of 90 days Snap Inc is expected to generate 0.73 times more return on investment than Alpha Bank. However, Snap Inc is 1.37 times less risky than Alpha Bank. It trades about -0.03 of its potential returns per unit of risk. Alpha Bank SA is currently generating about -0.04 per unit of risk. If you would invest 1,216 in Snap Inc on September 1, 2024 and sell it today you would lose (35.00) from holding Snap Inc or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Alpha Bank SA
Performance |
| Timeline |
| Snap Inc |
| Alpha Bank SA |
Snap and Alpha Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Alpha Bank
The main advantage of trading using opposite Snap and Alpha Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Alpha Bank 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 Alpha Bank will offset losses from the drop in Alpha Bank's long position.The idea behind Snap Inc and Alpha Bank SA 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.| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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