Correlation Between Snap and Coastal Carolina
Can any of the company-specific risk be diversified away by investing in both Snap and Coastal Carolina 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 Coastal Carolina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Coastal Carolina Bancshares, you can compare the effects of market volatilities on Snap and Coastal Carolina 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 Coastal Carolina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Coastal Carolina.
Diversification Opportunities for Snap and Coastal Carolina
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Coastal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Coastal Carolina Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Carolina Ban 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 Coastal Carolina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Carolina Ban has no effect on the direction of Snap i.e., Snap and Coastal Carolina go up and down completely randomly.
Pair Corralation between Snap and Coastal Carolina
Given the investment horizon of 90 days Snap Inc is expected to generate 4.67 times more return on investment than Coastal Carolina. However, Snap is 4.67 times more volatile than Coastal Carolina Bancshares. It trades about 0.03 of its potential returns per unit of risk. Coastal Carolina Bancshares is currently generating about 0.02 per unit of risk. If you would invest 940.00 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 221.00 from holding Snap Inc or generate 23.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Coastal Carolina Bancshares
Performance |
| Timeline |
| Snap Inc |
| Coastal Carolina Ban |
Snap and Coastal Carolina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Coastal Carolina
The main advantage of trading using opposite Snap and Coastal Carolina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Coastal Carolina 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 Coastal Carolina will offset losses from the drop in Coastal Carolina's long position.The idea behind Snap Inc and Coastal Carolina Bancshares 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.| Coastal Carolina vs. First Bankers Trustshares | Coastal Carolina vs. Greenville Federal Financial | Coastal Carolina vs. First Ottawa Bancshares | Coastal Carolina vs. Citizens Bancorp Investment |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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