Correlation Between Snap and Quotient Technology
Can any of the company-specific risk be diversified away by investing in both Snap and Quotient Technology 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 Quotient Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Quotient Technology, you can compare the effects of market volatilities on Snap and Quotient Technology 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 Quotient Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Quotient Technology.
Diversification Opportunities for Snap and Quotient Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Quotient is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Quotient Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quotient Technology 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 Quotient Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quotient Technology has no effect on the direction of Snap i.e., Snap and Quotient Technology go up and down completely randomly.
Pair Corralation between Snap and Quotient Technology
Given the investment horizon of 90 days Snap is expected to generate 1.83 times less return on investment than Quotient Technology. In addition to that, Snap is 1.14 times more volatile than Quotient Technology. It trades about 0.03 of its total potential returns per unit of risk. Quotient Technology is currently generating about 0.06 per unit of volatility. If you would invest 312.00 in Quotient Technology on August 24, 2024 and sell it today you would earn a total of 76.00 from holding Quotient Technology or generate 24.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.85% |
| Values | Daily Returns |
Snap Inc vs. Quotient Technology
Performance |
| Timeline |
| Snap Inc |
| Quotient Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Snap and Quotient Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Quotient Technology
The main advantage of trading using opposite Snap and Quotient Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Quotient Technology 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 Quotient Technology will offset losses from the drop in Quotient Technology's long position.The idea behind Snap Inc and Quotient Technology 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.| Quotient Technology vs. Emerald Expositions Events | Quotient Technology vs. Mirriad Advertising plc | Quotient Technology vs. INEO Tech Corp | Quotient Technology vs. Marchex |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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