Correlation Between Snap and Bank Tabungan
Can any of the company-specific risk be diversified away by investing in both Snap and Bank Tabungan 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 Tabungan 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 Tabungan Pensiunan, you can compare the effects of market volatilities on Snap and Bank Tabungan 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 Tabungan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Bank Tabungan.
Diversification Opportunities for Snap and Bank Tabungan
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and Bank is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Bank Tabungan Pensiunan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Pensiunan 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 Tabungan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Tabungan Pensiunan has no effect on the direction of Snap i.e., Snap and Bank Tabungan go up and down completely randomly.
Pair Corralation between Snap and Bank Tabungan
Given the investment horizon of 90 days Snap Inc is expected to generate 1.81 times more return on investment than Bank Tabungan. However, Snap is 1.81 times more volatile than Bank Tabungan Pensiunan. It trades about 0.0 of its potential returns per unit of risk. Bank Tabungan Pensiunan is currently generating about -0.08 per unit of risk. If you would invest 1,430 in Snap Inc on August 29, 2024 and sell it today you would lose (270.00) from holding Snap Inc or give up 18.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.76% |
| Values | Daily Returns |
Snap Inc vs. Bank Tabungan Pensiunan
Performance |
| Timeline |
| Snap Inc |
| Bank Tabungan Pensiunan |
Snap and Bank Tabungan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Bank Tabungan
The main advantage of trading using opposite Snap and Bank Tabungan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Bank Tabungan 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 Tabungan will offset losses from the drop in Bank Tabungan's long position.The idea behind Snap Inc and Bank Tabungan Pensiunan 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 Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan vs. Erajaya Swasembada Tbk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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