Correlation Between Snap On and Elutia

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

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

Diversification Opportunities for Snap On and Elutia

0.43

Correlation Coefficient

Snap On  Elutia

Very weak diversification

The 3 months correlation between Snap and Elutia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Snap On and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc and Snap On 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 On are associated (or correlated) with Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Snap On i.e., Snap On and Elutia go up and down completely randomly.

Pair Corralation between Snap On and Elutia

Considering the 90-day investment horizon Snap On is expected to generate 0.1 times more return on investment than Elutia. However, Snap On is 10.5 times less risky than Elutia. It trades about -0.29 of its potential returns per unit of risk. Elutia Inc is currently generating about -0.06 per unit of risk. If you would invest  35,460  in Snap On on October 8, 2024 and sell it today you would lose (1,853) from holding Snap On or give up 5.23% of portfolio value over 90 days.

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

Snap On  vs.  Elutia Inc

Snap On

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Snap On are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Snap On sustained solid returns over the last few months and may actually be approaching a breakup point.

Elutia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elutia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Elutia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Snap On and Elutia

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

The idea behind Snap On and Elutia Inc 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.