Correlation Between Snap and Leafbuyer Technologies

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

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

Diversification Opportunities for Snap and Leafbuyer Technologies

0.32

Correlation Coefficient

Snap  Leafbuyer Technologies

Weak diversification

The 3 months correlation between Snap and Leafbuyer is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Leafbuyer Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafbuyer Technologies 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 Leafbuyer Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafbuyer Technologies has no effect on the direction of Snap i.e., Snap and Leafbuyer Technologies go up and down completely randomly.

Pair Corralation between Snap and Leafbuyer Technologies

Given the investment horizon of 90 days Snap is expected to generate 77.02 times less return on investment than Leafbuyer Technologies. But when comparing it to its historical volatility, Snap Inc is 53.89 times less risky than Leafbuyer Technologies. It trades about 0.15 of its potential returns per unit of risk. Leafbuyer Technologies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Leafbuyer Technologies on September 12, 2024 and sell it today you would earn a total of  1.60  from holding Leafbuyer Technologies or generate 1600.0% return on investment over 90 days.

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

Snap Inc  vs.  Leafbuyer Technologies

Snap Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Snap Inc are ranked lower than 12 (%) 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.

Leafbuyer Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Leafbuyer Technologies are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Leafbuyer Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Snap and Leafbuyer Technologies

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

The idea behind Snap Inc and Leafbuyer Technologies 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.