Correlation Between Snap and Altai Resources
Can any of the company-specific risk be diversified away by investing in both Snap and Altai Resources 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 Altai Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Altai Resources, you can compare the effects of market volatilities on Snap and Altai Resources 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 Altai Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Altai Resources.
Diversification Opportunities for Snap and Altai Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Altai is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Altai Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altai Resources 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 Altai Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altai Resources has no effect on the direction of Snap i.e., Snap and Altai Resources go up and down completely randomly.
Pair Corralation between Snap and Altai Resources
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Altai Resources. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 2.33 times less risky than Altai Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Altai Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Altai Resources on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Altai Resources or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Snap Inc vs. Altai Resources
Performance |
| Timeline |
| Snap Inc |
| Altai Resources |
Snap and Altai Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Altai Resources
The main advantage of trading using opposite Snap and Altai Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Altai Resources 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 Altai Resources will offset losses from the drop in Altai Resources' long position.The idea behind Snap Inc and Altai Resources 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.| Altai Resources vs. Air Canada | Altai Resources vs. Upstart Investments | Altai Resources vs. Cogeco Communications | Altai Resources vs. Maple Leaf Foods |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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