Correlation Between Snap and Quhuo
Can any of the company-specific risk be diversified away by investing in both Snap and Quhuo 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 Quhuo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Quhuo, you can compare the effects of market volatilities on Snap and Quhuo 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 Quhuo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Quhuo.
Diversification Opportunities for Snap and Quhuo
Poor diversification
The 3 months correlation between Snap and Quhuo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Quhuo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quhuo 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 Quhuo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quhuo has no effect on the direction of Snap i.e., Snap and Quhuo go up and down completely randomly.
Pair Corralation between Snap and Quhuo
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Quhuo. In addition to that, Snap is 1.06 times more volatile than Quhuo. It trades about -0.11 of its total potential returns per unit of risk. Quhuo is currently generating about -0.07 per unit of volatility. If you would invest 148.00 in Quhuo on August 31, 2024 and sell it today you would lose (8.00) from holding Quhuo or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Quhuo
Performance |
| Timeline |
| Snap Inc |
| Quhuo |
Snap and Quhuo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Quhuo
The main advantage of trading using opposite Snap and Quhuo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Quhuo 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 Quhuo will offset losses from the drop in Quhuo's long position.The idea behind Snap Inc and Quhuo 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.| Quhuo vs. Sentage Holdings | Quhuo vs. Lixiang Education Holding | Quhuo vs. Huadi International Group | Quhuo vs. Baosheng Media Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |