Correlation Between Snap and Winner Group
Can any of the company-specific risk be diversified away by investing in both Snap and Winner 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 Winner 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 Winner Group Enterprise, you can compare the effects of market volatilities on Snap and Winner 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 Winner Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Winner Group.
Diversification Opportunities for Snap and Winner Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Snap and Winner is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Winner Group Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Group Enterprise 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 Winner Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Group Enterprise has no effect on the direction of Snap i.e., Snap and Winner Group go up and down completely randomly.
Pair Corralation between Snap and Winner Group
Given the investment horizon of 90 days Snap Inc is expected to under-perform the Winner Group. But the stock apears to be less risky and, when comparing its historical volatility, Snap Inc is 23.24 times less risky than Winner Group. The stock trades about -0.03 of its potential returns per unit of risk. The Winner Group Enterprise is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 204.00 in Winner Group Enterprise on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Winner Group Enterprise or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Snap Inc vs. Winner Group Enterprise
Performance |
| Timeline |
| Snap Inc |
| Winner Group Enterprise |
Snap and Winner Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Winner Group
The main advantage of trading using opposite Snap and Winner Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Winner 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 Winner Group will offset losses from the drop in Winner Group's long position.The idea behind Snap Inc and Winner Group Enterprise 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.| Winner Group vs. T S Flour | Winner Group vs. Vintcom Technology PCL | Winner Group vs. Thanapiriya Public | Winner Group vs. Ubis Public |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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