Correlation Between Snowflake and AXA SA
Can any of the company-specific risk be diversified away by investing in both Snowflake and AXA SA 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 Snowflake and AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and AXA SA, you can compare the effects of market volatilities on Snowflake and AXA SA 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 Snowflake with a short position of AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and AXA SA.
Diversification Opportunities for Snowflake and AXA SA
Excellent diversification
The 3 months correlation between Snowflake and AXA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA and Snowflake 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 Snowflake are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Snowflake i.e., Snowflake and AXA SA go up and down completely randomly.
Pair Corralation between Snowflake and AXA SA
Given the investment horizon of 90 days Snowflake is expected to generate 5.4 times more return on investment than AXA SA. However, Snowflake is 5.4 times more volatile than AXA SA. It trades about 0.29 of its potential returns per unit of risk. AXA SA is currently generating about -0.28 per unit of risk. If you would invest 11,361 in Snowflake on August 24, 2024 and sell it today you would earn a total of 5,774 from holding Snowflake or generate 50.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Snowflake vs. AXA SA
Performance |
| Timeline |
| Snowflake |
| AXA SA |
Snowflake and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and AXA SA
The main advantage of trading using opposite Snowflake and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.The idea behind Snowflake and AXA SA 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.| AXA SA vs. Assicurazioni Generali SpA | AXA SA vs. Athene Holding | AXA SA vs. Athene Holding | AXA SA vs. Arch Capital Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |