Correlation Between Snap and Fidelity Salem
Can any of the company-specific risk be diversified away by investing in both Snap and Fidelity Salem 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 Fidelity Salem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Fidelity Salem Street, you can compare the effects of market volatilities on Snap and Fidelity Salem 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 Fidelity Salem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Fidelity Salem.
Diversification Opportunities for Snap and Fidelity Salem
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Fidelity is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Fidelity Salem Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Salem Street 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 Fidelity Salem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Salem Street has no effect on the direction of Snap i.e., Snap and Fidelity Salem go up and down completely randomly.
Pair Corralation between Snap and Fidelity Salem
Given the investment horizon of 90 days Snap Inc is expected to generate 4.92 times more return on investment than Fidelity Salem. However, Snap is 4.92 times more volatile than Fidelity Salem Street. It trades about 0.05 of its potential returns per unit of risk. Fidelity Salem Street is currently generating about 0.07 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Fidelity Salem Street
Performance |
| Timeline |
| Snap Inc |
| Fidelity Salem Street |
Snap and Fidelity Salem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Fidelity Salem
The main advantage of trading using opposite Snap and Fidelity Salem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Fidelity Salem 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 Fidelity Salem will offset losses from the drop in Fidelity Salem's long position.The idea behind Snap Inc and Fidelity Salem Street 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.| Fidelity Salem vs. Balanced Fund Investor | Fidelity Salem vs. Western Asset Municipal | Fidelity Salem vs. Falcon Focus Scv | Fidelity Salem vs. Abr 7525 Volatility |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |