Correlation Between Snap and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Snap and Kraft Bank 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 Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Kraft Bank Asa, you can compare the effects of market volatilities on Snap and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Kraft Bank.
Diversification Opportunities for Snap and Kraft Bank
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Snap and Kraft is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Snap i.e., Snap and Kraft Bank go up and down completely randomly.
Pair Corralation between Snap and Kraft Bank
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Kraft Bank. In addition to that, Snap is 1.18 times more volatile than Kraft Bank Asa. It trades about -0.03 of its total potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.02 per unit of volatility. If you would invest 900.00 in Kraft Bank Asa on September 1, 2024 and sell it today you would lose (15.00) from holding Kraft Bank Asa or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Snap Inc vs. Kraft Bank Asa
Performance |
| Timeline |
| Snap Inc |
| Kraft Bank Asa |
Snap and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Kraft Bank
The main advantage of trading using opposite Snap and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.The idea behind Snap Inc and Kraft Bank Asa 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.| Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Odfjell Drilling | Kraft Bank vs. Helgeland Sparebank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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