Correlation Between Snap and Emerald Insights
Can any of the company-specific risk be diversified away by investing in both Snap and Emerald Insights 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 Emerald Insights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Emerald Insights Fund, you can compare the effects of market volatilities on Snap and Emerald Insights 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 Emerald Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Emerald Insights.
Diversification Opportunities for Snap and Emerald Insights
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Emerald is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Emerald Insights Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Insights 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 Emerald Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Insights has no effect on the direction of Snap i.e., Snap and Emerald Insights go up and down completely randomly.
Pair Corralation between Snap and Emerald Insights
Given the investment horizon of 90 days Snap Inc is expected to generate 3.79 times more return on investment than Emerald Insights. However, Snap is 3.79 times more volatile than Emerald Insights Fund. It trades about 0.05 of its potential returns per unit of risk. Emerald Insights Fund is currently generating about 0.12 per unit of risk. If you would invest 869.00 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 292.00 from holding Snap Inc or generate 33.6% 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. Emerald Insights Fund
Performance |
| Timeline |
| Snap Inc |
| Emerald Insights |
Snap and Emerald Insights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Emerald Insights
The main advantage of trading using opposite Snap and Emerald Insights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Emerald Insights 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 Emerald Insights will offset losses from the drop in Emerald Insights' long position.The idea behind Snap Inc and Emerald Insights 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.| Emerald Insights vs. Forum Real Estate | Emerald Insights vs. Pender Real Estate | Emerald Insights vs. Us Real Estate | Emerald Insights vs. John Hancock Variable |
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.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |