Correlation Between Snowflake and AMEREN
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By analyzing existing cross correlation between Snowflake and AMEREN P 365, you can compare the effects of market volatilities on Snowflake and AMEREN 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 AMEREN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and AMEREN.
Diversification Opportunities for Snowflake and AMEREN
Excellent diversification
The 3 months correlation between Snowflake and AMEREN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and AMEREN P 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMEREN P 365 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 AMEREN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMEREN P 365 has no effect on the direction of Snowflake i.e., Snowflake and AMEREN go up and down completely randomly.
Pair Corralation between Snowflake and AMEREN
Given the investment horizon of 90 days Snowflake is expected to generate 13.13 times more return on investment than AMEREN. However, Snowflake is 13.13 times more volatile than AMEREN P 365. It trades about 0.29 of its potential returns per unit of risk. AMEREN P 365 is currently generating about -0.2 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 | Very Weak |
| Accuracy | 69.57% |
| Values | Daily Returns |
Snowflake vs. AMEREN P 365
Performance |
| Timeline |
| Snowflake |
| AMEREN P 365 |
Snowflake and AMEREN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and AMEREN
The main advantage of trading using opposite Snowflake and AMEREN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, AMEREN 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 AMEREN will offset losses from the drop in AMEREN's long position.The idea behind Snowflake and AMEREN P 365 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.| AMEREN vs. Patterson UTI Energy | AMEREN vs. Kinetik Holdings | AMEREN vs. Delek Drilling | AMEREN vs. Transocean |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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