Correlation Between Snap and Qurate Retail

Can any of the company-specific risk be diversified away by investing in both Snap and Qurate Retail 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 Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Snap Inc and Qurate Retail Series, you can compare the effects of market volatilities on Snap and Qurate Retail 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 Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Qurate Retail.

Diversification Opportunities for Snap and Qurate Retail

-0.46

Correlation Coefficient

Snap  Qurate Retail

Very good diversification

The 3 months correlation between Snap and Qurate is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Snap i.e., Snap and Qurate Retail go up and down completely randomly.

Pair Corralation between Snap and Qurate Retail

Given the investment horizon of 90 days Snap Inc is expected to generate 0.72 times more return on investment than Qurate Retail. However, Snap Inc is 1.39 times less risky than Qurate Retail. It trades about 0.09 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.04 per unit of risk. If you would invest  964.00  in Snap Inc on September 15, 2024 and sell it today you would earn a total of  167.00  from holding Snap Inc or generate 17.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Snap Inc  vs.  Qurate Retail Series

Snap Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Snap Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Snap reported solid returns over the last few months and may actually be approaching a breakup point.

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Snap and Qurate Retail

The main advantage of trading using opposite Snap and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.

The idea behind Snap Inc and Qurate Retail Series 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.