Correlation Between Snap and Salisbury Bancorp
Can any of the company-specific risk be diversified away by investing in both Snap and Salisbury Bancorp 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 Salisbury Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Salisbury Bancorp, you can compare the effects of market volatilities on Snap and Salisbury Bancorp 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 Salisbury Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Salisbury Bancorp.
Diversification Opportunities for Snap and Salisbury Bancorp
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snap and Salisbury is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Salisbury Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salisbury Bancorp 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 Salisbury Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salisbury Bancorp has no effect on the direction of Snap i.e., Snap and Salisbury Bancorp go up and down completely randomly.
Pair Corralation between Snap and Salisbury Bancorp
Given the investment horizon of 90 days Snap Inc is expected to generate 1.8 times more return on investment than Salisbury Bancorp. However, Snap is 1.8 times more volatile than Salisbury Bancorp. It trades about 0.03 of its potential returns per unit of risk. Salisbury Bancorp is currently generating about -0.02 per unit of risk. If you would invest 940.00 in Snap Inc on August 29, 2024 and sell it today you would earn a total of 220.00 from holding Snap Inc or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.52% |
| Values | Daily Returns |
Snap Inc vs. Salisbury Bancorp
Performance |
| Timeline |
| Snap Inc |
| Salisbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Snap and Salisbury Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Salisbury Bancorp
The main advantage of trading using opposite Snap and Salisbury Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Salisbury Bancorp 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 Salisbury Bancorp will offset losses from the drop in Salisbury Bancorp's long position.The idea behind Snap Inc and Salisbury Bancorp 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.| Salisbury Bancorp vs. Home Federal Bancorp | Salisbury Bancorp vs. First Northwest Bancorp | Salisbury Bancorp vs. National Bank Holdings | Salisbury Bancorp vs. Community Bank System |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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