Correlation Between Snap and Federated Short-term
Can any of the company-specific risk be diversified away by investing in both Snap and Federated Short-term 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 Federated Short-term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Federated Short Term Income, you can compare the effects of market volatilities on Snap and Federated Short-term 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 Federated Short-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Federated Short-term.
Diversification Opportunities for Snap and Federated Short-term
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Snap and Federated is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Federated Short Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Term 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 Federated Short-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Term has no effect on the direction of Snap i.e., Snap and Federated Short-term go up and down completely randomly.
Pair Corralation between Snap and Federated Short-term
Given the investment horizon of 90 days Snap Inc is expected to generate 26.37 times more return on investment than Federated Short-term. However, Snap is 26.37 times more volatile than Federated Short Term Income. It trades about 0.03 of its potential returns per unit of risk. Federated Short Term Income is currently generating about 0.13 per unit of risk. If you would invest 945.00 in Snap Inc on August 30, 2024 and sell it today you would earn a total of 216.00 from holding Snap Inc or generate 22.86% 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. Federated Short Term Income
Performance |
| Timeline |
| Snap Inc |
| Federated Short Term |
Snap and Federated Short-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Federated Short-term
The main advantage of trading using opposite Snap and Federated Short-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Federated Short-term 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 Federated Short-term will offset losses from the drop in Federated Short-term's long position.The idea behind Snap Inc and Federated Short Term Income 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.| Federated Short-term vs. Vanguard Emerging Markets | Federated Short-term vs. Ab Select Longshort | Federated Short-term vs. Transamerica Emerging Markets | Federated Short-term vs. T Rowe Price |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |