Correlation Between Cars and Snap
Can any of the company-specific risk be diversified away by investing in both Cars and Snap 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 Cars and Snap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Snap Inc, you can compare the effects of market volatilities on Cars and Snap 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 Cars with a short position of Snap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Snap.
Diversification Opportunities for Cars and Snap
Very good diversification
The 3 months correlation between Cars and Snap is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Snap Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap Inc and Cars 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 Cars Inc are associated (or correlated) with Snap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap Inc has no effect on the direction of Cars i.e., Cars and Snap go up and down completely randomly.
Pair Corralation between Cars and Snap
Given the investment horizon of 90 days Cars Inc is expected to under-perform the Snap. But the stock apears to be less risky and, when comparing its historical volatility, Cars Inc is 1.23 times less risky than Snap. The stock trades about -0.04 of its potential returns per unit of risk. The Snap Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Snap Inc on September 2, 2025 and sell it today you would earn a total of 35.00 from holding Snap Inc or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. Snap Inc
Performance |
| Timeline |
| Cars Inc |
| Snap Inc |
Cars and Snap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Snap
The main advantage of trading using opposite Cars and Snap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Snap 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 Snap will offset losses from the drop in Snap's long position.| Cars vs. Northstar Clean Technologies | Cars vs. SoftwareONE Holding AG | Cars vs. China Clean Energy | Cars vs. CVW CleanTech |
| Snap vs. Home Loan Financial | Snap vs. First Ship Lease | Snap vs. Loans4LessCom | Snap vs. Topsports International Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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