Correlation Between MAHLE Metal and Snowflake
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Snowflake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Snowflake, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Snowflake.
Diversification Opportunities for MAHLE Metal and Snowflake
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAHLE and Snowflake is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Snowflake go up and down completely randomly.
Pair Corralation between MAHLE Metal and Snowflake
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Snowflake. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 2.08 times less risky than Snowflake. The stock trades about -0.03 of its potential returns per unit of risk. The Snowflake is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,434 in Snowflake on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Snowflake or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Snowflake
Performance |
| Timeline |
| MAHLE Metal Leve |
| Snowflake |
MAHLE Metal and Snowflake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Snowflake
The main advantage of trading using opposite MAHLE Metal and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Snowflake vs. Metalurgica Gerdau SA | Snowflake vs. CVS Health | Snowflake vs. NXP Semiconductors NV | Snowflake vs. Paycom Software |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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