Correlation Between Snap and Ethereum Name
Can any of the company-specific risk be diversified away by investing in both Snap and Ethereum Name 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 Ethereum Name into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Ethereum Name Service, you can compare the effects of market volatilities on Snap and Ethereum Name 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 Ethereum Name. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Ethereum Name.
Diversification Opportunities for Snap and Ethereum Name
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Snap and Ethereum is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Ethereum Name Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum Name Service 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 Ethereum Name. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum Name Service has no effect on the direction of Snap i.e., Snap and Ethereum Name go up and down completely randomly.
Pair Corralation between Snap and Ethereum Name
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Ethereum Name. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 4.0 times less risky than Ethereum Name. The stock trades about -0.11 of its potential returns per unit of risk. The Ethereum Name Service is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Ethereum Name Service on August 31, 2024 and sell it today you would earn a total of 1,714 from holding Ethereum Name Service or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Ethereum Name Service
Performance |
| Timeline |
| Snap Inc |
| Ethereum Name Service |
Snap and Ethereum Name Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Ethereum Name
The main advantage of trading using opposite Snap and Ethereum Name positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Ethereum Name 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 Ethereum Name will offset losses from the drop in Ethereum Name's long position.The idea behind Snap Inc and Ethereum Name Service 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.| Ethereum Name vs. Ethereum Classic | Ethereum Name vs. Ethereum PoW | Ethereum Name vs. Staked Ether | Ethereum Name vs. EigenLayer |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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