Correlation Between Snap and InRetail Peru
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By analyzing existing cross correlation between Snap Inc and InRetail Peru Corp, you can compare the effects of market volatilities on Snap and InRetail Peru 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 InRetail Peru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and InRetail Peru.
Diversification Opportunities for Snap and InRetail Peru
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and InRetail is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and InRetail Peru Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InRetail Peru Corp 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 InRetail Peru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InRetail Peru Corp has no effect on the direction of Snap i.e., Snap and InRetail Peru go up and down completely randomly.
Pair Corralation between Snap and InRetail Peru
Given the investment horizon of 90 days Snap Inc is expected to generate 3.72 times more return on investment than InRetail Peru. However, Snap is 3.72 times more volatile than InRetail Peru Corp. It trades about 0.03 of its potential returns per unit of risk. InRetail Peru Corp is currently generating about -0.02 per unit of risk. If you would invest 930.00 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 230.00 from holding Snap Inc or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.76% |
| Values | Daily Returns |
Snap Inc vs. InRetail Peru Corp
Performance |
| Timeline |
| Snap Inc |
| InRetail Peru Corp |
Snap and InRetail Peru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and InRetail Peru
The main advantage of trading using opposite Snap and InRetail Peru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, InRetail Peru 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 InRetail Peru will offset losses from the drop in InRetail Peru's long position.The idea behind Snap Inc and InRetail Peru Corp 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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