Correlation Between Snap and Elray Resources
Can any of the company-specific risk be diversified away by investing in both Snap and Elray Resources 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 Elray Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Elray Resources, you can compare the effects of market volatilities on Snap and Elray Resources 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 Elray Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Elray Resources.
Diversification Opportunities for Snap and Elray Resources
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Elray is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Elray Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elray Resources 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 Elray Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elray Resources has no effect on the direction of Snap i.e., Snap and Elray Resources go up and down completely randomly.
Pair Corralation between Snap and Elray Resources
Given the investment horizon of 90 days Snap is expected to generate 2.4 times less return on investment than Elray Resources. But when comparing it to its historical volatility, Snap Inc is 4.16 times less risky than Elray Resources. It trades about 0.13 of its potential returns per unit of risk. Elray Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Elray Resources on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Elray Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Elray Resources
Performance |
| Timeline |
| Snap Inc |
| Elray Resources |
Snap and Elray Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Elray Resources
The main advantage of trading using opposite Snap and Elray Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Elray Resources 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 Elray Resources will offset losses from the drop in Elray Resources' long position.The idea behind Snap Inc and Elray Resources 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.| Elray Resources vs. Accel Entertainment | Elray Resources vs. Light Wonder | Elray Resources vs. Everi Holdings | Elray Resources vs. Inspired Entertainment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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