Correlation Between SNM Gobal and Aftermaster
Can any of the company-specific risk be diversified away by investing in both SNM Gobal and Aftermaster 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 SNM Gobal and Aftermaster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNM Gobal Holdings and Aftermaster, you can compare the effects of market volatilities on SNM Gobal and Aftermaster 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 SNM Gobal with a short position of Aftermaster. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNM Gobal and Aftermaster.
Diversification Opportunities for SNM Gobal and Aftermaster
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SNM and Aftermaster is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SNM Gobal Holdings and Aftermaster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermaster and SNM Gobal 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 SNM Gobal Holdings are associated (or correlated) with Aftermaster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermaster has no effect on the direction of SNM Gobal i.e., SNM Gobal and Aftermaster go up and down completely randomly.
Pair Corralation between SNM Gobal and Aftermaster
Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 3.66 times more return on investment than Aftermaster. However, SNM Gobal is 3.66 times more volatile than Aftermaster. It trades about 0.1 of its potential returns per unit of risk. Aftermaster is currently generating about 0.03 per unit of risk. If you would invest 0.06 in SNM Gobal Holdings on August 30, 2024 and sell it today you would lose (0.05) from holding SNM Gobal Holdings or give up 83.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNM Gobal Holdings vs. Aftermaster
Performance |
| Timeline |
| SNM Gobal Holdings |
| Aftermaster |
SNM Gobal and Aftermaster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNM Gobal and Aftermaster
The main advantage of trading using opposite SNM Gobal and Aftermaster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNM Gobal position performs unexpectedly, Aftermaster 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 Aftermaster will offset losses from the drop in Aftermaster's long position.| SNM Gobal vs. Warner Music Group | SNM Gobal vs. Live Nation Entertainment | SNM Gobal vs. Atlanta Braves Holdings, | SNM Gobal vs. Warner Bros Discovery |
| Aftermaster vs. American Picture House | Aftermaster vs. Anghami Warrants | Aftermaster vs. Maxx Sports TV |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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