Correlation Between Snap and AMAZON
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By analyzing existing cross correlation between Snap Inc and AMAZON INC 405, you can compare the effects of market volatilities on Snap and AMAZON 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 AMAZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and AMAZON.
Diversification Opportunities for Snap and AMAZON
Excellent diversification
The 3 months correlation between Snap and AMAZON is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and AMAZON INC 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZON INC 405 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 AMAZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZON INC 405 has no effect on the direction of Snap i.e., Snap and AMAZON go up and down completely randomly.
Pair Corralation between Snap and AMAZON
Given the investment horizon of 90 days Snap Inc is expected to generate 3.15 times more return on investment than AMAZON. However, Snap is 3.15 times more volatile than AMAZON INC 405. It trades about 0.1 of its potential returns per unit of risk. AMAZON INC 405 is currently generating about 0.15 per unit of risk. If you would invest 1,071 in Snap Inc on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Snap Inc or generate 8.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Snap Inc vs. AMAZON INC 405
Performance |
| Timeline |
| Snap Inc |
| AMAZON INC 405 |
Snap and AMAZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and AMAZON
The main advantage of trading using opposite Snap and AMAZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, AMAZON 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 AMAZON will offset losses from the drop in AMAZON's long position.The idea behind Snap Inc and AMAZON INC 405 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.| AMAZON vs. The Coca Cola | AMAZON vs. JPMorgan Chase Co | AMAZON vs. Dupont De Nemours | AMAZON vs. Alcoa 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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