Correlation Between Snap and Saga Pure
Can any of the company-specific risk be diversified away by investing in both Snap and Saga Pure 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 Saga Pure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Saga Pure ASA, you can compare the effects of market volatilities on Snap and Saga Pure 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 Saga Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Saga Pure.
Diversification Opportunities for Snap and Saga Pure
Poor diversification
The 3 months correlation between Snap and Saga is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Saga Pure ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Pure ASA 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 Saga Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Pure ASA has no effect on the direction of Snap i.e., Snap and Saga Pure go up and down completely randomly.
Pair Corralation between Snap and Saga Pure
Given the investment horizon of 90 days Snap Inc is expected to generate 4.59 times more return on investment than Saga Pure. However, Snap is 4.59 times more volatile than Saga Pure ASA. It trades about 0.12 of its potential returns per unit of risk. Saga Pure ASA is currently generating about -0.06 per unit of risk. If you would invest 1,027 in Snap Inc on August 25, 2024 and sell it today you would earn a total of 115.00 from holding Snap Inc or generate 11.2% 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. Saga Pure ASA
Performance |
| Timeline |
| Snap Inc |
| Saga Pure ASA |
Snap and Saga Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Saga Pure
The main advantage of trading using opposite Snap and Saga Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Saga Pure 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 Saga Pure will offset losses from the drop in Saga Pure's long position.The idea behind Snap Inc and Saga Pure ASA 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.| Saga Pure vs. Aker Horizons AS | Saga Pure vs. REC Silicon ASA | Saga Pure vs. Kongsberg Automotive Holding | Saga Pure vs. Aker Carbon Capture |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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