Correlation Between Snap and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Snap and Guinness Atkinson 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 Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Guinness Atkinson Global, you can compare the effects of market volatilities on Snap and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Guinness Atkinson.
Diversification Opportunities for Snap and Guinness Atkinson
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Guinness is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Snap i.e., Snap and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Snap and Guinness Atkinson
Given the investment horizon of 90 days Snap Inc is expected to generate 5.36 times more return on investment than Guinness Atkinson. However, Snap is 5.36 times more volatile than Guinness Atkinson Global. It trades about 0.1 of its potential returns per unit of risk. Guinness Atkinson Global is currently generating about 0.04 per unit of risk. If you would invest 1,071 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Snap Inc or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Guinness Atkinson Global
Performance |
| Timeline |
| Snap Inc |
| Guinness Atkinson Global |
Snap and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Guinness Atkinson
The main advantage of trading using opposite Snap and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.The idea behind Snap Inc and Guinness Atkinson Global 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.| Guinness Atkinson vs. Guinness Atkinson Global | Guinness Atkinson vs. Siit Dynamic Asset | Guinness Atkinson vs. Simt Sp 500 | Guinness Atkinson vs. Columbia Large Cap |
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 CEOs Directory module to screen CEOs from public companies around the world.
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