Correlation Between Snap and FTAC Emerald
Can any of the company-specific risk be diversified away by investing in both Snap and FTAC Emerald 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 FTAC Emerald into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and FTAC Emerald Acquisition, you can compare the effects of market volatilities on Snap and FTAC Emerald 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 FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and FTAC Emerald.
Diversification Opportunities for Snap and FTAC Emerald
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and FTAC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald Acquisition 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 FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of Snap i.e., Snap and FTAC Emerald go up and down completely randomly.
Pair Corralation between Snap and FTAC Emerald
Given the investment horizon of 90 days Snap Inc is expected to under-perform the FTAC Emerald. In addition to that, Snap is 3.87 times more volatile than FTAC Emerald Acquisition. It trades about -0.03 of its total potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.15 per unit of volatility. If you would invest 1,090 in FTAC Emerald Acquisition on September 1, 2024 and sell it today you would earn a total of 27.00 from holding FTAC Emerald Acquisition or generate 2.48% 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. FTAC Emerald Acquisition
Performance |
| Timeline |
| Snap Inc |
| FTAC Emerald Acquisition |
Snap and FTAC Emerald Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and FTAC Emerald
The main advantage of trading using opposite Snap and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald's long position.The idea behind Snap Inc and FTAC Emerald Acquisition 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.| FTAC Emerald vs. HF Sinclair Corp | FTAC Emerald vs. Qualys Inc | FTAC Emerald vs. NetSol Technologies | FTAC Emerald vs. Cebu Air ADR |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |