Correlation Between Snap and Golden Haven
Can any of the company-specific risk be diversified away by investing in both Snap and Golden Haven 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 Golden Haven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Golden Haven Memorial, you can compare the effects of market volatilities on Snap and Golden Haven 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 Golden Haven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Golden Haven.
Diversification Opportunities for Snap and Golden Haven
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Golden is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Golden Haven Memorial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Haven Memorial 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 Golden Haven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Haven Memorial has no effect on the direction of Snap i.e., Snap and Golden Haven go up and down completely randomly.
Pair Corralation between Snap and Golden Haven
Given the investment horizon of 90 days Snap is expected to generate 1.07 times less return on investment than Golden Haven. In addition to that, Snap is 1.12 times more volatile than Golden Haven Memorial. It trades about 0.15 of its total potential returns per unit of risk. Golden Haven Memorial is currently generating about 0.18 per unit of volatility. If you would invest 165,000 in Golden Haven Memorial on August 31, 2024 and sell it today you would earn a total of 50,000 from holding Golden Haven Memorial or generate 30.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Snap Inc vs. Golden Haven Memorial
Performance |
| Timeline |
| Snap Inc |
| Golden Haven Memorial |
Snap and Golden Haven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Golden Haven
The main advantage of trading using opposite Snap and Golden Haven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Golden Haven 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 Golden Haven will offset losses from the drop in Golden Haven's long position.The idea behind Snap Inc and Golden Haven Memorial 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.| Golden Haven vs. Alliance Select Foods | Golden Haven vs. Century Pacific Food | Golden Haven vs. Robinsons Retail Holdings | Golden Haven vs. Suntrust Home Developers |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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