Correlation Between Snap and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Snap and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Goldman Sachs High, you can compare the effects of market volatilities on Snap and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Goldman Sachs.
Diversification Opportunities for Snap and Goldman Sachs
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Goldman is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Goldman Sachs High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs High 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs High has no effect on the direction of Snap i.e., Snap and Goldman Sachs go up and down completely randomly.
Pair Corralation between Snap and Goldman Sachs
If you would invest 1,089 in Snap Inc on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Snap Inc or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Snap Inc vs. Goldman Sachs High
Performance |
| Timeline |
| Snap Inc |
| Goldman Sachs High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Snap and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Goldman Sachs
The main advantage of trading using opposite Snap and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.The idea behind Snap Inc and Goldman Sachs High 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.| Goldman Sachs vs. Live Oak Health | Goldman Sachs vs. Baillie Gifford Health | Goldman Sachs vs. Tekla Healthcare Opportunities | Goldman Sachs vs. Eventide Healthcare Life |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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