Correlation Between Snap and Intuitive Investments
Can any of the company-specific risk be diversified away by investing in both Snap and Intuitive Investments 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 Intuitive Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Intuitive Investments Group, you can compare the effects of market volatilities on Snap and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Intuitive Investments.
Diversification Opportunities for Snap and Intuitive Investments
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Snap and Intuitive is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Snap i.e., Snap and Intuitive Investments go up and down completely randomly.
Pair Corralation between Snap and Intuitive Investments
Given the investment horizon of 90 days Snap is expected to generate 2.91 times less return on investment than Intuitive Investments. But when comparing it to its historical volatility, Snap Inc is 1.6 times less risky than Intuitive Investments. It trades about 0.03 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,500 in Intuitive Investments Group on August 31, 2024 and sell it today you would earn a total of 6,800 from holding Intuitive Investments Group or generate 123.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.94% |
| Values | Daily Returns |
Snap Inc vs. Intuitive Investments Group
Performance |
| Timeline |
| Snap Inc |
| Intuitive Investments |
Snap and Intuitive Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Intuitive Investments
The main advantage of trading using opposite Snap and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.The idea behind Snap Inc and Intuitive Investments Group 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.| Intuitive Investments vs. Waste Management | Intuitive Investments vs. Liontrust Asset Management | Intuitive Investments vs. American Homes 4 | Intuitive Investments vs. Coor Service Management |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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