Correlation Between Snap and Cullen High
Can any of the company-specific risk be diversified away by investing in both Snap and Cullen High 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 Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Cullen High Dividend, you can compare the effects of market volatilities on Snap and Cullen High 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 Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Cullen High.
Diversification Opportunities for Snap and Cullen High
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and CULLEN is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend 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 Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Snap i.e., Snap and Cullen High go up and down completely randomly.
Pair Corralation between Snap and Cullen High
Given the investment horizon of 90 days Snap Inc is expected to generate 6.14 times more return on investment than Cullen High. However, Snap is 6.14 times more volatile than Cullen High Dividend. It trades about 0.07 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.01 per unit of risk. If you would invest 1,070 in Snap Inc on August 30, 2024 and sell it today you would earn a total of 91.00 from holding Snap Inc or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Cullen High Dividend
Performance |
| Timeline |
| Snap Inc |
| Cullen High Dividend |
Snap and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Cullen High
The main advantage of trading using opposite Snap and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Cullen High 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 Cullen High will offset losses from the drop in Cullen High's long position.The idea behind Snap Inc and Cullen High Dividend 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.| Cullen High vs. Franklin Adjustable Government | Cullen High vs. Lord Abbett Government | Cullen High vs. Short Term Government Fund | Cullen High vs. Virtus Seix Government |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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