Correlation Between Snap and Phoenix New
Can any of the company-specific risk be diversified away by investing in both Snap and Phoenix New 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 Phoenix New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Phoenix New Media, you can compare the effects of market volatilities on Snap and Phoenix New 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 Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Phoenix New.
Diversification Opportunities for Snap and Phoenix New
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Snap and Phoenix is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media 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 Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of Snap i.e., Snap and Phoenix New go up and down completely randomly.
Pair Corralation between Snap and Phoenix New
Given the investment horizon of 90 days Snap Inc is expected to generate 1.02 times more return on investment than Phoenix New. However, Snap is 1.02 times more volatile than Phoenix New Media. It trades about 0.11 of its potential returns per unit of risk. Phoenix New Media is currently generating about -0.1 per unit of risk. If you would invest 1,045 in Snap Inc on August 26, 2024 and sell it today you would earn a total of 97.00 from holding Snap Inc or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Phoenix New Media
Performance |
| Timeline |
| Snap Inc |
| Phoenix New Media |
Snap and Phoenix New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Phoenix New
The main advantage of trading using opposite Snap and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Phoenix New 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 Phoenix New will offset losses from the drop in Phoenix New's long position.The idea behind Snap Inc and Phoenix New Media 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.| Phoenix New vs. Onfolio Holdings | Phoenix New vs. Starbox Group Holdings | Phoenix New vs. MediaAlpha | Phoenix New vs. Metalpha Technology Holding |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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