Correlation Between Snap and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Snap and Aberdeen Global 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 Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Aberdeen Global High, you can compare the effects of market volatilities on Snap and Aberdeen Global 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 Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Aberdeen Global.
Diversification Opportunities for Snap and Aberdeen Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Aberdeen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Aberdeen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global High 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 Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global High has no effect on the direction of Snap i.e., Snap and Aberdeen Global go up and down completely randomly.
Pair Corralation between Snap and Aberdeen Global
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Aberdeen Global. In addition to that, Snap is 16.49 times more volatile than Aberdeen Global High. It trades about -0.03 of its total potential returns per unit of risk. Aberdeen Global High is currently generating about 0.14 per unit of volatility. If you would invest 696.00 in Aberdeen Global High on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Aberdeen Global High or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Snap Inc vs. Aberdeen Global High
Performance |
| Timeline |
| Snap Inc |
| Aberdeen Global High |
Snap and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Aberdeen Global
The main advantage of trading using opposite Snap and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.The idea behind Snap Inc and Aberdeen Global High 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.| Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Emerging Markets | Aberdeen Global vs. Aberdeen Gbl Eq |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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