Correlation Between Snowflake and Kingsoft Cloud
Can any of the company-specific risk be diversified away by investing in both Snowflake and Kingsoft Cloud 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 Kingsoft Cloud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and Kingsoft Cloud Holdings, you can compare the effects of market volatilities on Snowflake and Kingsoft Cloud 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 Kingsoft Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Kingsoft Cloud.
Diversification Opportunities for Snowflake and Kingsoft Cloud
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Snowflake and Kingsoft is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Kingsoft Cloud Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsoft Cloud Holdings 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 Kingsoft Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsoft Cloud Holdings has no effect on the direction of Snowflake i.e., Snowflake and Kingsoft Cloud go up and down completely randomly.
Pair Corralation between Snowflake and Kingsoft Cloud
Given the investment horizon of 90 days Snowflake is expected to generate 5.57 times less return on investment than Kingsoft Cloud. But when comparing it to its historical volatility, Snowflake is 4.92 times less risky than Kingsoft Cloud. It trades about 0.12 of its potential returns per unit of risk. Kingsoft Cloud Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 840.00 in Kingsoft Cloud Holdings on October 20, 2024 and sell it today you would earn a total of 157.00 from holding Kingsoft Cloud Holdings or generate 18.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snowflake vs. Kingsoft Cloud Holdings
Performance |
| Timeline |
| Snowflake |
| Kingsoft Cloud Holdings |
Snowflake and Kingsoft Cloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and Kingsoft Cloud
The main advantage of trading using opposite Snowflake and Kingsoft Cloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Kingsoft Cloud 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 Kingsoft Cloud will offset losses from the drop in Kingsoft Cloud's long position.The idea behind Snowflake and Kingsoft Cloud Holdings 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.| Kingsoft Cloud vs. Genpact Limited | Kingsoft Cloud vs. Broadridge Financial Solutions | Kingsoft Cloud vs. BrightView Holdings | Kingsoft Cloud vs. First Advantage Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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