Correlation Between Snipp Interactive and Global Payout

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

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

Diversification Opportunities for Snipp Interactive and Global Payout

-0.38

Correlation Coefficient

Snipp Interactive  Global Payout

Very good diversification

The 3 months correlation between Snipp and Global is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Snipp Interactive and Global Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payout and Snipp Interactive 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 Snipp Interactive are associated (or correlated) with Global Payout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payout has no effect on the direction of Snipp Interactive i.e., Snipp Interactive and Global Payout go up and down completely randomly.

Pair Corralation between Snipp Interactive and Global Payout

Assuming the 90 days horizon Snipp Interactive is expected to generate 0.4 times more return on investment than Global Payout. However, Snipp Interactive is 2.47 times less risky than Global Payout. It trades about 0.11 of its potential returns per unit of risk. Global Payout is currently generating about 0.03 per unit of risk. If you would invest  5.58  in Snipp Interactive on September 12, 2024 and sell it today you would earn a total of  0.82  from holding Snipp Interactive or generate 14.7% return on investment over 90 days.

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

Snipp Interactive  vs.  Global Payout

Snipp Interactive

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Snipp Interactive are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Snipp Interactive reported solid returns over the last few months and may actually be approaching a breakup point.

Global Payout

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Payout are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Global Payout exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Snipp Interactive and Global Payout

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

The idea behind Snipp Interactive and Global Payout 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.