Correlation Between Snap and Newport Exploration
Can any of the company-specific risk be diversified away by investing in both Snap and Newport Exploration 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 Newport Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Newport Exploration, you can compare the effects of market volatilities on Snap and Newport Exploration 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 Newport Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Newport Exploration.
Diversification Opportunities for Snap and Newport Exploration
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snap and Newport is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Newport Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Exploration 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 Newport Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Exploration has no effect on the direction of Snap i.e., Snap and Newport Exploration go up and down completely randomly.
Pair Corralation between Snap and Newport Exploration
Given the investment horizon of 90 days Snap Inc is expected to generate 0.69 times more return on investment than Newport Exploration. However, Snap Inc is 1.46 times less risky than Newport Exploration. It trades about 0.11 of its potential returns per unit of risk. Newport Exploration is currently generating about -0.16 per unit of risk. If you would invest 1,045 in Snap Inc on August 26, 2024 and sell it today you would earn a total of 97.00 from holding Snap Inc or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Newport Exploration
Performance |
| Timeline |
| Snap Inc |
| Newport Exploration |
Snap and Newport Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Newport Exploration
The main advantage of trading using opposite Snap and Newport Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Newport Exploration 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 Newport Exploration will offset losses from the drop in Newport Exploration's long position.The idea behind Snap Inc and Newport Exploration 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.| Newport Exploration vs. McChip Resources | Newport Exploration vs. Highway 50 Gold | Newport Exploration vs. ProAm Explorations Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |