Correlation Between Snap and Lassonde Industries
Can any of the company-specific risk be diversified away by investing in both Snap and Lassonde Industries 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 Lassonde Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Lassonde Industries, you can compare the effects of market volatilities on Snap and Lassonde Industries 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 Lassonde Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Lassonde Industries.
Diversification Opportunities for Snap and Lassonde Industries
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Lassonde is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Lassonde Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassonde Industries 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 Lassonde Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassonde Industries has no effect on the direction of Snap i.e., Snap and Lassonde Industries go up and down completely randomly.
Pair Corralation between Snap and Lassonde Industries
Given the investment horizon of 90 days Snap Inc is expected to generate 2.08 times more return on investment than Lassonde Industries. However, Snap is 2.08 times more volatile than Lassonde Industries. It trades about 0.1 of its potential returns per unit of risk. Lassonde Industries is currently generating about 0.02 per unit of risk. If you would invest 1,071 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Lassonde Industries
Performance |
| Timeline |
| Snap Inc |
| Lassonde Industries |
Snap and Lassonde Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Lassonde Industries
The main advantage of trading using opposite Snap and Lassonde Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Lassonde Industries 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 Lassonde Industries will offset losses from the drop in Lassonde Industries' long position.The idea behind Snap Inc and Lassonde Industries 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.| Lassonde Industries vs. KDA Group | Lassonde Industries vs. iShares Canadian HYBrid | Lassonde Industries vs. Altagas Cum Red | Lassonde Industries vs. European Residential Real |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |