Correlation Between Snap and OceanaGold
Can any of the company-specific risk be diversified away by investing in both Snap and OceanaGold 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 OceanaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and OceanaGold, you can compare the effects of market volatilities on Snap and OceanaGold 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 OceanaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and OceanaGold.
Diversification Opportunities for Snap and OceanaGold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and OceanaGold is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and OceanaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanaGold 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 OceanaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanaGold has no effect on the direction of Snap i.e., Snap and OceanaGold go up and down completely randomly.
Pair Corralation between Snap and OceanaGold
Given the investment horizon of 90 days Snap Inc is expected to under-perform the OceanaGold. In addition to that, Snap is 1.12 times more volatile than OceanaGold. It trades about -0.03 of its total potential returns per unit of risk. OceanaGold is currently generating about 0.2 per unit of volatility. If you would invest 395.00 in OceanaGold on September 1, 2024 and sell it today you would earn a total of 47.00 from holding OceanaGold or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Snap Inc vs. OceanaGold
Performance |
| Timeline |
| Snap Inc |
| OceanaGold |
Snap and OceanaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and OceanaGold
The main advantage of trading using opposite Snap and OceanaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, OceanaGold 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 OceanaGold will offset losses from the drop in OceanaGold's long position.The idea behind Snap Inc and OceanaGold 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.| OceanaGold vs. Torex Gold Resources | OceanaGold vs. Wesdome Gold Mines | OceanaGold vs. Centerra Gold | OceanaGold vs. New Gold |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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