Correlation Between Snap and Clicks
Can any of the company-specific risk be diversified away by investing in both Snap and Clicks 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 Clicks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Clicks, you can compare the effects of market volatilities on Snap and Clicks 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 Clicks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Clicks.
Diversification Opportunities for Snap and Clicks
Very weak diversification
The 3 months correlation between Snap and Clicks is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Clicks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clicks 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 Clicks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clicks has no effect on the direction of Snap i.e., Snap and Clicks go up and down completely randomly.
Pair Corralation between Snap and Clicks
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Clicks. In addition to that, Snap is 2.65 times more volatile than Clicks. It trades about -0.11 of its total potential returns per unit of risk. Clicks is currently generating about 0.19 per unit of volatility. If you would invest 3,798,800 in Clicks on August 31, 2024 and sell it today you would earn a total of 193,800 from holding Clicks or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Snap Inc vs. Clicks
Performance |
| Timeline |
| Snap Inc |
| Clicks |
Snap and Clicks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Clicks
The main advantage of trading using opposite Snap and Clicks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Clicks 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 Clicks will offset losses from the drop in Clicks' long position.The idea behind Snap Inc and Clicks 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.| Clicks vs. Afine Investments | Clicks vs. RCL Foods | Clicks vs. Frontier Transport Holdings | Clicks vs. Astoria Investments |
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.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |