Correlation Between Snowflake and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Snowflake and Siemens Healthineers 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 Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and Siemens Healthineers AG, you can compare the effects of market volatilities on Snowflake and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Siemens Healthineers.
Diversification Opportunities for Snowflake and Siemens Healthineers
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snowflake and Siemens is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Snowflake i.e., Snowflake and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Snowflake and Siemens Healthineers
Given the investment horizon of 90 days Snowflake is expected to generate 4.17 times more return on investment than Siemens Healthineers. However, Snowflake is 4.17 times more volatile than Siemens Healthineers AG. It trades about 0.27 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.08 per unit of risk. If you would invest 11,899 in Snowflake on August 31, 2024 and sell it today you would earn a total of 5,471 from holding Snowflake or generate 45.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snowflake vs. Siemens Healthineers AG
Performance |
| Timeline |
| Snowflake |
| Siemens Healthineers |
Snowflake and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and Siemens Healthineers
The main advantage of trading using opposite Snowflake and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.The idea behind Snowflake and Siemens Healthineers AG 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.| Siemens Healthineers vs. Sonova Holding AG | Siemens Healthineers vs. Medtronic PLC | Siemens Healthineers vs. CONMED | Siemens Healthineers vs. Glaukos 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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