Correlation Between Snap and Astor Star
Can any of the company-specific risk be diversified away by investing in both Snap and Astor Star 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 Astor Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Astor Star Fund, you can compare the effects of market volatilities on Snap and Astor Star 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 Astor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Astor Star.
Diversification Opportunities for Snap and Astor Star
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Astor is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund 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 Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of Snap i.e., Snap and Astor Star go up and down completely randomly.
Pair Corralation between Snap and Astor Star
Given the investment horizon of 90 days Snap Inc is expected to generate 6.88 times more return on investment than Astor Star. However, Snap is 6.88 times more volatile than Astor Star Fund. It trades about 0.1 of its potential returns per unit of risk. Astor Star Fund is currently generating about 0.32 per unit of risk. 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 | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Astor Star Fund
Performance |
| Timeline |
| Snap Inc |
| Astor Star Fund |
Snap and Astor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Astor Star
The main advantage of trading using opposite Snap and Astor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Astor Star 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 Astor Star will offset losses from the drop in Astor Star's long position.The idea behind Snap Inc and Astor Star Fund 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.| Astor Star vs. Astor Longshort Fund | Astor Star vs. Astor Longshort Fund | Astor Star vs. Fidelity Balanced Fund | Astor Star vs. Thrivent Moderate Allocation |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |