Correlation Between Snap and Invesco Value
Can any of the company-specific risk be diversified away by investing in both Snap and Invesco Value 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 Invesco Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Invesco Value Municipal, you can compare the effects of market volatilities on Snap and Invesco Value 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 Invesco Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Invesco Value.
Diversification Opportunities for Snap and Invesco Value
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Invesco is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Invesco Value Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Value Municipal 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 Invesco Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Value Municipal has no effect on the direction of Snap i.e., Snap and Invesco Value go up and down completely randomly.
Pair Corralation between Snap and Invesco Value
Given the investment horizon of 90 days Snap Inc is expected to generate 6.98 times more return on investment than Invesco Value. However, Snap is 6.98 times more volatile than Invesco Value Municipal. It trades about 0.1 of its potential returns per unit of risk. Invesco Value Municipal is currently generating about 0.02 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 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Snap Inc vs. Invesco Value Municipal
Performance |
| Timeline |
| Snap Inc |
| Invesco Value Municipal |
Snap and Invesco Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Invesco Value
The main advantage of trading using opposite Snap and Invesco Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Invesco Value 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 Invesco Value will offset losses from the drop in Invesco Value's long position.The idea behind Snap Inc and Invesco Value Municipal 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.| Invesco Value vs. Invesco Municipal Income | Invesco Value vs. DWS Municipal Income | Invesco Value vs. MFS Municipal Income | Invesco Value vs. MFS High Income |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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