Correlation Between Snap and Hanza AB
Can any of the company-specific risk be diversified away by investing in both Snap and Hanza AB 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 Hanza AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Hanza AB, you can compare the effects of market volatilities on Snap and Hanza AB 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 Hanza AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Hanza AB.
Diversification Opportunities for Snap and Hanza AB
Weak diversification
The 3 months correlation between Snap and Hanza is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Hanza AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanza AB 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 Hanza AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanza AB has no effect on the direction of Snap i.e., Snap and Hanza AB go up and down completely randomly.
Pair Corralation between Snap and Hanza AB
Given the investment horizon of 90 days Snap Inc is expected to generate 1.78 times more return on investment than Hanza AB. However, Snap is 1.78 times more volatile than Hanza AB. It trades about 0.01 of its potential returns per unit of risk. Hanza AB is currently generating about -0.01 per unit of risk. If you would invest 1,298 in Snap Inc on August 25, 2024 and sell it today you would lose (156.00) from holding Snap Inc or give up 12.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Hanza AB
Performance |
| Timeline |
| Snap Inc |
| Hanza AB |
Snap and Hanza AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Hanza AB
The main advantage of trading using opposite Snap and Hanza AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Hanza AB 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 Hanza AB will offset losses from the drop in Hanza AB's long position.The idea behind Snap Inc and Hanza AB 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.| Hanza AB vs. Divio Technologies AB | Hanza AB vs. XMReality AB | Hanza AB vs. KABE Group AB | Hanza AB vs. IAR Systems Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |