Correlation Between One Step and SNM Gobal

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

By analyzing existing cross correlation between One Step Vending and SNM Gobal Holdings, you can compare the effects of market volatilities on One Step and SNM Gobal 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 One Step with a short position of SNM Gobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Step and SNM Gobal.

Diversification Opportunities for One Step and SNM Gobal

0.64

Correlation Coefficient

One Step  SNM Gobal

Poor diversification

The 3 months correlation between One and SNM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding One Step Vending and SNM Gobal Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNM Gobal Holdings and One Step 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 One Step Vending are associated (or correlated) with SNM Gobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNM Gobal Holdings has no effect on the direction of One Step i.e., One Step and SNM Gobal go up and down completely randomly.

Pair Corralation between One Step and SNM Gobal

Given the investment horizon of 90 days One Step is expected to generate 8.84 times less return on investment than SNM Gobal. But when comparing it to its historical volatility, One Step Vending is 8.56 times less risky than SNM Gobal. It trades about 0.13 of its potential returns per unit of risk. SNM Gobal Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.00  in SNM Gobal Holdings on December 25, 2024 and sell it today you would earn a total of  0.01  from holding SNM Gobal Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.33%
Values	Daily Returns

One Step Vending  vs.  SNM Gobal Holdings

One Step Vending

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in One Step Vending are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, One Step disclosed solid returns over the last few months and may actually be approaching a breakup point.

SNM Gobal Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SNM Gobal Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, SNM Gobal displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with One Step and SNM Gobal

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

The idea behind One Step Vending and SNM Gobal Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .