Correlation Between Snap and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Snap and IES Holdings 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 IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and IES Holdings, you can compare the effects of market volatilities on Snap and IES Holdings 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 IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and IES Holdings.
Diversification Opportunities for Snap and IES Holdings
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and IES is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings 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 IES Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IES Holdings has no effect on the direction of Snap i.e., Snap and IES Holdings go up and down completely randomly.
Pair Corralation between Snap and IES Holdings
Given the investment horizon of 90 days Snap is expected to generate 1.9 times less return on investment than IES Holdings. In addition to that, Snap is 2.78 times more volatile than IES Holdings. It trades about 0.12 of its total potential returns per unit of risk. IES Holdings is currently generating about 0.65 per unit of volatility. If you would invest 1,958,000 in IES Holdings on August 25, 2024 and sell it today you would earn a total of 377,000 from holding IES Holdings or generate 19.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.91% |
| Values | Daily Returns |
Snap Inc vs. IES Holdings
Performance |
| Timeline |
| Snap Inc |
| IES Holdings |
Snap and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and IES Holdings
The main advantage of trading using opposite Snap and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, IES Holdings 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 IES Holdings will offset losses from the drop in IES Holdings' long position.The idea behind Snap Inc and IES Holdings 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.| IES Holdings vs. Israel Canada | IES Holdings vs. Azrieli Group | IES Holdings vs. Delek Group | IES Holdings vs. Shikun Binui |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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