Correlation Between Snap and Bank Ganesha
Can any of the company-specific risk be diversified away by investing in both Snap and Bank Ganesha 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 Bank Ganesha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Bank Ganesha Tbk, you can compare the effects of market volatilities on Snap and Bank Ganesha 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 Bank Ganesha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Bank Ganesha.
Diversification Opportunities for Snap and Bank Ganesha
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Bank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Bank Ganesha Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ganesha Tbk 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 Bank Ganesha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ganesha Tbk has no effect on the direction of Snap i.e., Snap and Bank Ganesha go up and down completely randomly.
Pair Corralation between Snap and Bank Ganesha
Given the investment horizon of 90 days Snap Inc is expected to generate 2.24 times more return on investment than Bank Ganesha. However, Snap is 2.24 times more volatile than Bank Ganesha Tbk. It trades about 0.13 of its potential returns per unit of risk. Bank Ganesha Tbk is currently generating about -0.1 per unit of risk. If you would invest 1,027 in Snap Inc on August 25, 2024 and sell it today you would earn a total of 115.00 from holding Snap Inc or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Bank Ganesha Tbk
Performance |
| Timeline |
| Snap Inc |
| Bank Ganesha Tbk |
Snap and Bank Ganesha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Bank Ganesha
The main advantage of trading using opposite Snap and Bank Ganesha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Bank Ganesha 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 Bank Ganesha will offset losses from the drop in Bank Ganesha's long position.The idea behind Snap Inc and Bank Ganesha Tbk 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.| Bank Ganesha vs. Bk Harda Internasional | Bank Ganesha vs. Bank Yudha Bhakti | Bank Ganesha vs. Bank Mnc Internasional | Bank Ganesha vs. Bank Capital Indonesia |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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