Correlation Between Snap and Duta Pertiwi
Can any of the company-specific risk be diversified away by investing in both Snap and Duta Pertiwi 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 Duta Pertiwi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Duta Pertiwi Tbk, you can compare the effects of market volatilities on Snap and Duta Pertiwi 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 Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Duta Pertiwi.
Diversification Opportunities for Snap and Duta Pertiwi
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Duta is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Duta Pertiwi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi Tbk 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 Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Tbk has no effect on the direction of Snap i.e., Snap and Duta Pertiwi go up and down completely randomly.
Pair Corralation between Snap and Duta Pertiwi
Given the investment horizon of 90 days Snap Inc is expected to generate 1.96 times more return on investment than Duta Pertiwi. However, Snap is 1.96 times more volatile than Duta Pertiwi Tbk. It trades about 0.03 of its potential returns per unit of risk. Duta Pertiwi Tbk is currently generating about -0.01 per unit of risk. If you would invest 1,051 in Snap Inc on August 27, 2024 and sell it today you would earn a total of 91.00 from holding Snap Inc or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.98% |
| Values | Daily Returns |
Snap Inc vs. Duta Pertiwi Tbk
Performance |
| Timeline |
| Snap Inc |
| Duta Pertiwi Tbk |
Snap and Duta Pertiwi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Duta Pertiwi
The main advantage of trading using opposite Snap and Duta Pertiwi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Duta Pertiwi 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 Duta Pertiwi will offset losses from the drop in Duta Pertiwi's long position.The idea behind Snap Inc and Duta Pertiwi Tbk 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.| Duta Pertiwi vs. Duta Anggada Realty | Duta Pertiwi vs. Intiland Development Tbk | Duta Pertiwi vs. Bhuwanatala Indah Permai | Duta Pertiwi vs. Fortune Mate Indonesia |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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