Correlation Between Snap and Allianzgi Technology
Can any of the company-specific risk be diversified away by investing in both Snap and Allianzgi 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 Allianzgi 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 Allianzgi Technology Fund, you can compare the effects of market volatilities on Snap and Allianzgi 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 Allianzgi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Allianzgi Technology.
Diversification Opportunities for Snap and Allianzgi Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Allianzgi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi 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 Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of Snap i.e., Snap and Allianzgi Technology go up and down completely randomly.
Pair Corralation between Snap and Allianzgi Technology
Given the investment horizon of 90 days Snap Inc is expected to generate 2.92 times more return on investment than Allianzgi Technology. However, Snap is 2.92 times more volatile than Allianzgi Technology Fund. It trades about 0.06 of its potential returns per unit of risk. Allianzgi Technology Fund is currently generating about 0.12 per unit of risk. If you would invest 1,057 in Snap Inc on August 25, 2024 and sell it today you would earn a total of 85.00 from holding Snap Inc or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Allianzgi Technology Fund
Performance |
| Timeline |
| Snap Inc |
| Allianzgi Technology |
Snap and Allianzgi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Allianzgi Technology
The main advantage of trading using opposite Snap and Allianzgi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Allianzgi 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 Allianzgi Technology will offset losses from the drop in Allianzgi Technology's long position.The idea behind Snap Inc and Allianzgi Technology Fund 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.| Allianzgi Technology vs. Red Oak Technology | Allianzgi Technology vs. Kinetics Internet Fund | Allianzgi Technology vs. Aquagold International | Allianzgi Technology vs. Morningstar Unconstrained Allocation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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