Correlation Between AMTD Digital and Snowflake
Can any of the company-specific risk be diversified away by investing in both AMTD Digital 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 AMTD Digital and Snowflake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMTD Digital and Snowflake, you can compare the effects of market volatilities on AMTD Digital 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 AMTD Digital with a short position of Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMTD Digital and Snowflake.
Diversification Opportunities for AMTD Digital and Snowflake
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMTD and Snowflake is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AMTD Digital and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and AMTD Digital 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 AMTD Digital 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 AMTD Digital i.e., AMTD Digital and Snowflake go up and down completely randomly.
Pair Corralation between AMTD Digital and Snowflake
Considering the 90-day investment horizon AMTD Digital is expected to under-perform the Snowflake. But the stock apears to be less risky and, when comparing its historical volatility, AMTD Digital is 1.04 times less risky than Snowflake. The stock trades about -0.26 of its potential returns per unit of risk. The Snowflake is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 15,751 in Snowflake on November 2, 2024 and sell it today you would earn a total of 2,178 from holding Snowflake or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMTD Digital vs. Snowflake
Performance |
| Timeline |
| AMTD Digital |
| Snowflake |
AMTD Digital and Snowflake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMTD Digital and Snowflake
The main advantage of trading using opposite AMTD Digital and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD Digital 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.| AMTD Digital vs. HeartCore Enterprises | AMTD Digital vs. Beamr Imaging Ltd | AMTD Digital vs. CXApp Inc | AMTD Digital vs. SoundHound AI |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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