Correlation Between Snowflake and APPLE
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By analyzing existing cross correlation between Snowflake and APPLE INC, you can compare the effects of market volatilities on Snowflake and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and APPLE.
Diversification Opportunities for Snowflake and APPLE
Very good diversification
The 3 months correlation between Snowflake and APPLE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of Snowflake i.e., Snowflake and APPLE go up and down completely randomly.
Pair Corralation between Snowflake and APPLE
Given the investment horizon of 90 days Snowflake is expected to generate 3.56 times more return on investment than APPLE. However, Snowflake is 3.56 times more volatile than APPLE INC. It trades about 0.29 of its potential returns per unit of risk. APPLE INC is currently generating about 0.14 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 | 100.0% |
| Values | Daily Returns |
Snowflake vs. APPLE INC
Performance |
| Timeline |
| Snowflake |
| APPLE INC |
Snowflake and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and APPLE
The main advantage of trading using opposite Snowflake and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.The idea behind Snowflake and APPLE INC 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.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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