Correlation Between Snap and Hoffmen Cleanindo
Can any of the company-specific risk be diversified away by investing in both Snap and Hoffmen Cleanindo 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 Hoffmen Cleanindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Hoffmen Cleanindo, you can compare the effects of market volatilities on Snap and Hoffmen Cleanindo 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 Hoffmen Cleanindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Hoffmen Cleanindo.
Diversification Opportunities for Snap and Hoffmen Cleanindo
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Snap and Hoffmen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Hoffmen Cleanindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoffmen Cleanindo 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 Hoffmen Cleanindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoffmen Cleanindo has no effect on the direction of Snap i.e., Snap and Hoffmen Cleanindo go up and down completely randomly.
Pair Corralation between Snap and Hoffmen Cleanindo
Given the investment horizon of 90 days Snap Inc is expected to generate 1.0 times more return on investment than Hoffmen Cleanindo. However, Snap is 1.0 times more volatile than Hoffmen Cleanindo. It trades about 0.04 of its potential returns per unit of risk. Hoffmen Cleanindo is currently generating about -0.03 per unit of risk. If you would invest 827.00 in Snap Inc on August 31, 2024 and sell it today you would earn a total of 334.00 from holding Snap Inc or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.43% |
| Values | Daily Returns |
Snap Inc vs. Hoffmen Cleanindo
Performance |
| Timeline |
| Snap Inc |
| Hoffmen Cleanindo |
Snap and Hoffmen Cleanindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Hoffmen Cleanindo
The main advantage of trading using opposite Snap and Hoffmen Cleanindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Hoffmen Cleanindo 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 Hoffmen Cleanindo will offset losses from the drop in Hoffmen Cleanindo's long position.The idea behind Snap Inc and Hoffmen Cleanindo 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.| Hoffmen Cleanindo vs. Bank Central Asia | Hoffmen Cleanindo vs. Bank Rakyat Indonesia | Hoffmen Cleanindo vs. Bayan Resources Tbk | Hoffmen Cleanindo vs. Bank Mandiri Persero |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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