Correlation Between Snap and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Snap and Lyxor UCITS 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 Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Lyxor UCITS ETF, you can compare the effects of market volatilities on Snap and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Lyxor UCITS.
Diversification Opportunities for Snap and Lyxor UCITS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Lyxor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Lyxor UCITS ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS ETF 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS ETF has no effect on the direction of Snap i.e., Snap and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Snap and Lyxor UCITS
Given the investment horizon of 90 days Snap Inc is expected to generate 5.49 times more return on investment than Lyxor UCITS. However, Snap is 5.49 times more volatile than Lyxor UCITS ETF. It trades about 0.03 of its potential returns per unit of risk. Lyxor UCITS ETF is currently generating about 0.09 per unit of risk. If you would invest 945.00 in Snap Inc on August 30, 2024 and sell it today you would earn a total of 216.00 from holding Snap Inc or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Snap Inc vs. Lyxor UCITS ETF
Performance |
| Timeline |
| Snap Inc |
| Lyxor UCITS ETF |
Snap and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Lyxor UCITS
The main advantage of trading using opposite Snap and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.The idea behind Snap Inc and Lyxor UCITS ETF 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.| Lyxor UCITS vs. iShares ATX UCITS | Lyxor UCITS vs. RATH Aktiengesellschaft | Lyxor UCITS vs. AT S Austria | Lyxor UCITS vs. BAWAG Group AG |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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