Correlation Between Snap and Clavister Holding
Can any of the company-specific risk be diversified away by investing in both Snap and Clavister Holding 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 Clavister Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Clavister Holding AB, you can compare the effects of market volatilities on Snap and Clavister Holding 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 Clavister Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Clavister Holding.
Diversification Opportunities for Snap and Clavister Holding
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Snap and Clavister is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Clavister Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clavister Holding 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 Clavister Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clavister Holding has no effect on the direction of Snap i.e., Snap and Clavister Holding go up and down completely randomly.
Pair Corralation between Snap and Clavister Holding
Given the investment horizon of 90 days Snap is expected to generate 2.45 times less return on investment than Clavister Holding. But when comparing it to its historical volatility, Snap Inc is 1.21 times less risky than Clavister Holding. It trades about 0.01 of its potential returns per unit of risk. Clavister Holding AB is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 198.00 in Clavister Holding AB on August 25, 2024 and sell it today you would lose (17.00) from holding Clavister Holding AB or give up 8.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Clavister Holding AB
Performance |
| Timeline |
| Snap Inc |
| Clavister Holding |
Snap and Clavister Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Clavister Holding
The main advantage of trading using opposite Snap and Clavister Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Clavister Holding 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 Clavister Holding will offset losses from the drop in Clavister Holding's long position.The idea behind Snap Inc and Clavister Holding AB 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.| Clavister Holding vs. BIMobject AB | Clavister Holding vs. Advenica AB | Clavister Holding vs. Crunchfish AB | Clavister Holding vs. Nexam Chemical Holding |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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