Correlation Between Snap and Cannabix Technologies
Can any of the company-specific risk be diversified away by investing in both Snap and Cannabix Technologies 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 Cannabix Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Cannabix Technologies, you can compare the effects of market volatilities on Snap and Cannabix Technologies 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 Cannabix Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Cannabix Technologies.
Diversification Opportunities for Snap and Cannabix Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Cannabix is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Cannabix Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannabix Technologies 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 Cannabix Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannabix Technologies has no effect on the direction of Snap i.e., Snap and Cannabix Technologies go up and down completely randomly.
Pair Corralation between Snap and Cannabix Technologies
Given the investment horizon of 90 days Snap is expected to generate 3.94 times less return on investment than Cannabix Technologies. But when comparing it to its historical volatility, Snap Inc is 1.69 times less risky than Cannabix Technologies. It trades about 0.02 of its potential returns per unit of risk. Cannabix Technologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Cannabix Technologies on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Cannabix Technologies or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Cannabix Technologies
Performance |
| Timeline |
| Snap Inc |
| Cannabix Technologies |
Snap and Cannabix Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Cannabix Technologies
The main advantage of trading using opposite Snap and Cannabix Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Cannabix Technologies 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 Cannabix Technologies will offset losses from the drop in Cannabix Technologies' long position.The idea behind Snap Inc and Cannabix Technologies 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.| Cannabix Technologies vs. Manhattan Scients | Cannabix Technologies vs. VentriPoint Diagnostics | Cannabix Technologies vs. Accelerate Diagnostics | Cannabix Technologies vs. Venus Concept |
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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