Correlation Between SNM Gobal and Sack Lunch

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

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

Diversification Opportunities for SNM Gobal and Sack Lunch

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Correlation Coefficient

SNM Gobal  Sack Lunch

Pay attention - limited upside

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

Pair Corralation between SNM Gobal and Sack Lunch

Given the investment horizon of 90 days SNM Gobal Holdings is expected to generate 1.29 times more return on investment than Sack Lunch. However, SNM Gobal is 1.29 times more volatile than Sack Lunch Productions. It trades about 0.1 of its potential returns per unit of risk. Sack Lunch Productions is currently generating about 0.07 per unit of risk. If you would invest  0.04  in SNM Gobal Holdings on September 14, 2024 and sell it today you would lose (0.03) from holding SNM Gobal Holdings or give up 75.0% of portfolio value over 90 days.

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

SNM Gobal Holdings  vs.  Sack Lunch Productions

SNM Gobal Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days SNM Gobal Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, SNM Gobal is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Sack Lunch Productions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sack Lunch Productions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sack Lunch is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with SNM Gobal and Sack Lunch

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

The idea behind SNM Gobal Holdings and Sack Lunch Productions 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.