Correlation Between SNM Gobal and Maxx Sports
Can any of the company-specific risk be diversified away by investing in both SNM Gobal and Maxx Sports 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 Maxx Sports 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 Maxx Sports TV, you can compare the effects of market volatilities on SNM Gobal and Maxx Sports 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 Maxx Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNM Gobal and Maxx Sports.
Diversification Opportunities for SNM Gobal and Maxx Sports
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SNM and Maxx is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SNM Gobal Holdings and Maxx Sports TV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxx Sports TV 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 Maxx Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxx Sports TV has no effect on the direction of SNM Gobal i.e., SNM Gobal and Maxx Sports go up and down completely randomly.
Pair Corralation between SNM Gobal and Maxx Sports
Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 12.36 times more return on investment than Maxx Sports. However, SNM Gobal is 12.36 times more volatile than Maxx Sports TV. It trades about 0.21 of its potential returns per unit of risk. Maxx Sports TV is currently generating about 0.03 per unit of risk. If you would invest 0.02 in SNM Gobal Holdings on November 9, 2024 and sell it today you would lose (0.01) from holding SNM Gobal Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.67% |
| Values | Daily Returns |
SNM Gobal Holdings vs. Maxx Sports TV
Performance |
| Timeline |
| SNM Gobal Holdings |
| Maxx Sports TV |
SNM Gobal and Maxx Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNM Gobal and Maxx Sports
The main advantage of trading using opposite SNM Gobal and Maxx Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNM Gobal position performs unexpectedly, Maxx Sports 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 Maxx Sports will offset losses from the drop in Maxx Sports' long position.The idea behind SNM Gobal Holdings and Maxx Sports TV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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