Correlation Between Snap and Impero AS
Can any of the company-specific risk be diversified away by investing in both Snap and Impero AS 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 Impero AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Impero AS, you can compare the effects of market volatilities on Snap and Impero AS 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 Impero AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Impero AS.
Diversification Opportunities for Snap and Impero AS
Very good diversification
The 3 months correlation between Snap and Impero is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Impero AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impero AS 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 Impero AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impero AS has no effect on the direction of Snap i.e., Snap and Impero AS go up and down completely randomly.
Pair Corralation between Snap and Impero AS
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Impero AS. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 1.36 times less risky than Impero AS. The stock trades about -0.04 of its potential returns per unit of risk. The Impero AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 525.00 in Impero AS on August 25, 2024 and sell it today you would earn a total of 25.00 from holding Impero AS or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.69% |
| Values | Daily Returns |
Snap Inc vs. Impero AS
Performance |
| Timeline |
| Snap Inc |
| Impero AS |
Snap and Impero AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Impero AS
The main advantage of trading using opposite Snap and Impero AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Impero AS 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 Impero AS will offset losses from the drop in Impero AS's long position.The idea behind Snap Inc and Impero AS 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.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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