Correlation Between Snap and Kentucky Tax-free
Can any of the company-specific risk be diversified away by investing in both Snap and Kentucky Tax-free 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 Kentucky Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Kentucky Tax Free Income, you can compare the effects of market volatilities on Snap and Kentucky Tax-free 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 Kentucky Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Kentucky Tax-free.
Diversification Opportunities for Snap and Kentucky Tax-free
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Kentucky is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Kentucky Tax Free Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kentucky Tax Free 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 Kentucky Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kentucky Tax Free has no effect on the direction of Snap i.e., Snap and Kentucky Tax-free go up and down completely randomly.
Pair Corralation between Snap and Kentucky Tax-free
Given the investment horizon of 90 days Snap Inc is expected to generate 14.1 times more return on investment than Kentucky Tax-free. However, Snap is 14.1 times more volatile than Kentucky Tax Free Income. It trades about 0.13 of its potential returns per unit of risk. Kentucky Tax Free Income is currently generating about 0.02 per unit of risk. If you would invest 918.00 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 242.00 from holding Snap Inc or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Kentucky Tax Free Income
Performance |
| Timeline |
| Snap Inc |
| Kentucky Tax Free |
Snap and Kentucky Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Kentucky Tax-free
The main advantage of trading using opposite Snap and Kentucky Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Kentucky Tax-free 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 Kentucky Tax-free will offset losses from the drop in Kentucky Tax-free's long position.The idea behind Snap Inc and Kentucky Tax Free Income 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.| Kentucky Tax-free vs. Kentucky Tax Free Short To Medium | Kentucky Tax-free vs. North Carolina Tax Free | Kentucky Tax-free vs. Intermediate Government Bond | Kentucky Tax-free vs. Taxable Municipal Bond |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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