Correlation Between Snap and Crestwood Equity
Can any of the company-specific risk be diversified away by investing in both Snap and Crestwood Equity 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 Crestwood Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Crestwood Equity Partners, you can compare the effects of market volatilities on Snap and Crestwood Equity 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 Crestwood Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Crestwood Equity.
Diversification Opportunities for Snap and Crestwood Equity
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Crestwood is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Crestwood Equity Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crestwood Equity Partners 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 Crestwood Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crestwood Equity Partners has no effect on the direction of Snap i.e., Snap and Crestwood Equity go up and down completely randomly.
Pair Corralation between Snap and Crestwood Equity
If you would invest 1,071 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Snap Inc vs. Crestwood Equity Partners
Performance |
| Timeline |
| Snap Inc |
| Crestwood Equity Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Snap and Crestwood Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Crestwood Equity
The main advantage of trading using opposite Snap and Crestwood Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Crestwood Equity 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 Crestwood Equity will offset losses from the drop in Crestwood Equity's long position.The idea behind Snap Inc and Crestwood Equity Partners 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.| Crestwood Equity vs. Western Midstream Partners | Crestwood Equity vs. DT Midstream | Crestwood Equity vs. MPLX LP | Crestwood Equity vs. Enterprise Products Partners |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |