Correlation Between O I and Snap On

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

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

Diversification Opportunities for O I and Snap On

-0.3

Correlation Coefficient

O I  Snap On

Very good diversification

The 3 months correlation between O I and Snap is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Snap On in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap On and O I 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 O I Glass are associated (or correlated) with Snap On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap On has no effect on the direction of O I i.e., O I and Snap On go up and down completely randomly.

Pair Corralation between O I and Snap On

Allowing for the 90-day total investment horizon O I Glass is expected to under-perform the Snap On. In addition to that, O I is 1.6 times more volatile than Snap On. It trades about -0.07 of its total potential returns per unit of risk. Snap On is currently generating about -0.02 per unit of volatility. If you would invest  26,720  in Snap On on January 20, 2024 and sell it today you would lose (544.00) from holding Snap On or give up 2.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

O I Glass  vs.  Snap On

O I Glass

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in O I Glass are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, O I is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Snap On

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snap On has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with O I and Snap On

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

The idea behind O I Glass and Snap On 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.