Correlation Between Snap and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Snap and Listed Funds 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 Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Listed Funds Trust, you can compare the effects of market volatilities on Snap and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Listed Funds.
Diversification Opportunities for Snap and Listed Funds
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Snap and Listed is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Snap i.e., Snap and Listed Funds go up and down completely randomly.
Pair Corralation between Snap and Listed Funds
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Listed Funds. In addition to that, Snap is 17.78 times more volatile than Listed Funds Trust. It trades about -0.01 of its total potential returns per unit of risk. Listed Funds Trust is currently generating about 0.13 per unit of volatility. If you would invest 2,088 in Listed Funds Trust on August 28, 2024 and sell it today you would earn a total of 149.00 from holding Listed Funds Trust or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Snap Inc vs. Listed Funds Trust
Performance |
| Timeline |
| Snap Inc |
| Listed Funds Trust |
Snap and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Listed Funds
The main advantage of trading using opposite Snap and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.The idea behind Snap Inc and Listed Funds Trust 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.| Listed Funds vs. Dimensional ETF Trust | Listed Funds vs. Dimensional ETF Trust | Listed Funds vs. Dimensional Core Equity | Listed Funds vs. Dimensional ETF Trust |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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