Correlation Between Amexdrug and Snap On

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

By analyzing existing cross correlation between Amexdrug and Snap On, you can compare the effects of market volatilities on Amexdrug and Snap On 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 Amexdrug with a short position of Snap On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amexdrug and Snap On.

Diversification Opportunities for Amexdrug and Snap On

0.0

Correlation Coefficient

Amexdrug  Snap On

Pay attention - limited upside

The 3 months correlation between Amexdrug and Snap is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amexdrug and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On and Amexdrug 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 Amexdrug are associated (or correlated) with Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of Amexdrug i.e., Amexdrug and Snap On go up and down completely randomly.

Pair Corralation between Amexdrug and Snap On

If you would invest  0.20  in Amexdrug on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Amexdrug or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Amexdrug  vs.  Snap On

Amexdrug

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amexdrug has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amexdrug is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Snap On

Risk-Adjusted Performance

Very Weak

Over the last 90 days Snap On has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic 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 Amexdrug and Snap On

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

The idea behind Amexdrug and Snap On 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.