Correlation Between Snap and TKH Group
Can any of the company-specific risk be diversified away by investing in both Snap and TKH Group 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 TKH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and TKH Group NV, you can compare the effects of market volatilities on Snap and TKH Group 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 TKH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and TKH Group.
Diversification Opportunities for Snap and TKH Group
Good diversification
The 3 months correlation between Snap and TKH is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and TKH Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKH Group NV 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 TKH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKH Group NV has no effect on the direction of Snap i.e., Snap and TKH Group go up and down completely randomly.
Pair Corralation between Snap and TKH Group
Given the investment horizon of 90 days Snap Inc is expected to generate 2.45 times more return on investment than TKH Group. However, Snap is 2.45 times more volatile than TKH Group NV. It trades about 0.03 of its potential returns per unit of risk. TKH Group NV is currently generating about 0.0 per unit of risk. If you would invest 930.00 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 230.00 from holding Snap Inc or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Snap Inc vs. TKH Group NV
Performance |
| Timeline |
| Snap Inc |
| TKH Group NV |
Snap and TKH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and TKH Group
The main advantage of trading using opposite Snap and TKH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, TKH Group 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 TKH Group will offset losses from the drop in TKH Group's long position.The idea behind Snap Inc and TKH Group NV 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.| TKH Group vs. Aalberts Industries NV | TKH Group vs. BE Semiconductor Industries | TKH Group vs. AMG Advanced Metallurgical | TKH Group vs. Koninklijke Vopak NV |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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