Correlation Between Snap and Siit Large
Can any of the company-specific risk be diversified away by investing in both Snap and Siit Large 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 Siit Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Siit Large Cap, you can compare the effects of market volatilities on Snap and Siit Large 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 Siit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Siit Large.
Diversification Opportunities for Snap and Siit Large
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Siit is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap 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 Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Snap i.e., Snap and Siit Large go up and down completely randomly.
Pair Corralation between Snap and Siit Large
Given the investment horizon of 90 days Snap Inc is expected to generate 5.08 times more return on investment than Siit Large. However, Snap is 5.08 times more volatile than Siit Large Cap. It trades about 0.03 of its potential returns per unit of risk. Siit Large Cap is currently generating about 0.1 per unit of risk. If you would invest 1,004 in Snap Inc on August 31, 2024 and sell it today you would earn a total of 177.00 from holding Snap Inc or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Snap Inc vs. Siit Large Cap
Performance |
| Timeline |
| Snap Inc |
| Siit Large Cap |
Snap and Siit Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Siit Large
The main advantage of trading using opposite Snap and Siit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Siit Large 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 Siit Large will offset losses from the drop in Siit Large's long position.The idea behind Snap Inc and Siit Large Cap 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.| Siit Large vs. Barings Active Short | Siit Large vs. Sterling Capital Short | Siit Large vs. Aqr Sustainable Long Short | Siit Large vs. Maryland Short Term Tax Free |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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