Correlation Between Snap and Yunji
Can any of the company-specific risk be diversified away by investing in both Snap and Yunji 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 Yunji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Yunji Inc, you can compare the effects of market volatilities on Snap and Yunji 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 Yunji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Yunji.
Diversification Opportunities for Snap and Yunji
Very good diversification
The 3 months correlation between Snap and Yunji is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji Inc 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 Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of Snap i.e., Snap and Yunji go up and down completely randomly.
Pair Corralation between Snap and Yunji
Given the investment horizon of 90 days Snap Inc is expected to generate 0.41 times more return on investment than Yunji. However, Snap Inc is 2.42 times less risky than Yunji. It trades about -0.03 of its potential returns per unit of risk. Yunji Inc is currently generating about -0.04 per unit of risk. If you would invest 1,216 in Snap Inc on September 1, 2024 and sell it today you would lose (35.00) from holding Snap Inc or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Yunji Inc
Performance |
| Timeline |
| Snap Inc |
| Yunji Inc |
Snap and Yunji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Yunji
The main advantage of trading using opposite Snap and Yunji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Yunji 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 Yunji will offset losses from the drop in Yunji's long position.The idea behind Snap Inc and Yunji Inc 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.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |