Correlation Between Domo and Snowflake
Can any of the company-specific risk be diversified away by investing in both Domo and Snowflake 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 Domo and Snowflake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Inc and Snowflake, you can compare the effects of market volatilities on Domo and Snowflake 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 Domo with a short position of Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and Snowflake.
Diversification Opportunities for Domo and Snowflake
Poor diversification
The 3 months correlation between Domo and Snowflake is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and Domo 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 Domo Inc are associated (or correlated) with Snowflake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snowflake has no effect on the direction of Domo i.e., Domo and Snowflake go up and down completely randomly.
Pair Corralation between Domo and Snowflake
Given the investment horizon of 90 days Domo Inc is expected to generate 1.25 times more return on investment than Snowflake. However, Domo is 1.25 times more volatile than Snowflake. It trades about -0.04 of its potential returns per unit of risk. Snowflake is currently generating about -0.22 per unit of risk. If you would invest 880.00 in Domo Inc on December 13, 2024 and sell it today you would lose (59.00) from holding Domo Inc or give up 6.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Domo Inc vs. Snowflake
Performance |
| Timeline |
| Domo Inc |
| Snowflake |
Domo and Snowflake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Domo and Snowflake
The main advantage of trading using opposite Domo and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo position performs unexpectedly, Snowflake 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 Snowflake will offset losses from the drop in Snowflake's long position.The idea behind Domo Inc and Snowflake 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.Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |