Correlation Between Snap and Protagonist Therapeutics
Can any of the company-specific risk be diversified away by investing in both Snap and Protagonist Therapeutics 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 Protagonist Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Protagonist Therapeutics, you can compare the effects of market volatilities on Snap and Protagonist Therapeutics 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 Protagonist Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Protagonist Therapeutics.
Diversification Opportunities for Snap and Protagonist Therapeutics
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Protagonist is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Protagonist Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagonist Therapeutics 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 Protagonist Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagonist Therapeutics has no effect on the direction of Snap i.e., Snap and Protagonist Therapeutics go up and down completely randomly.
Pair Corralation between Snap and Protagonist Therapeutics
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Protagonist Therapeutics. In addition to that, Snap is 1.49 times more volatile than Protagonist Therapeutics. It trades about -0.01 of its total potential returns per unit of risk. Protagonist Therapeutics is currently generating about 0.11 per unit of volatility. If you would invest 2,501 in Protagonist Therapeutics on August 28, 2024 and sell it today you would earn a total of 2,052 from holding Protagonist Therapeutics or generate 82.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Protagonist Therapeutics
Performance |
| Timeline |
| Snap Inc |
| Protagonist Therapeutics |
Snap and Protagonist Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Protagonist Therapeutics
The main advantage of trading using opposite Snap and Protagonist Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Protagonist Therapeutics 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 Protagonist Therapeutics will offset losses from the drop in Protagonist Therapeutics' long position.The idea behind Snap Inc and Protagonist Therapeutics 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.| Protagonist Therapeutics vs. Eliem Therapeutics | Protagonist Therapeutics vs. HCW Biologics | Protagonist Therapeutics vs. Scpharmaceuticals | Protagonist Therapeutics vs. Milestone Pharmaceuticals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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