Correlation Between Snap and Roscan Gold
Can any of the company-specific risk be diversified away by investing in both Snap and Roscan Gold 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 Roscan Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Roscan Gold Corp, you can compare the effects of market volatilities on Snap and Roscan Gold 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 Roscan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Roscan Gold.
Diversification Opportunities for Snap and Roscan Gold
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Roscan is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan Gold Corp 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 Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of Snap i.e., Snap and Roscan Gold go up and down completely randomly.
Pair Corralation between Snap and Roscan Gold
Given the investment horizon of 90 days Snap is expected to generate 2.16 times less return on investment than Roscan Gold. But when comparing it to its historical volatility, Snap Inc is 1.76 times less risky than Roscan Gold. It trades about 0.01 of its potential returns per unit of risk. Roscan Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8.90 in Roscan Gold Corp on August 25, 2024 and sell it today you would lose (3.25) from holding Roscan Gold Corp or give up 36.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Roscan Gold Corp
Performance |
| Timeline |
| Snap Inc |
| Roscan Gold Corp |
Snap and Roscan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Roscan Gold
The main advantage of trading using opposite Snap and Roscan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Roscan Gold 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 Roscan Gold will offset losses from the drop in Roscan Gold's long position.The idea behind Snap Inc and Roscan Gold Corp 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.| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Liberty Gold Corp | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Orezone Gold Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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