Correlation Between Snowflake and GENERAL
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By analyzing existing cross correlation between Snowflake and GENERAL ELEC CAP, you can compare the effects of market volatilities on Snowflake and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and GENERAL.
Diversification Opportunities for Snowflake and GENERAL
Very good diversification
The 3 months correlation between Snowflake and GENERAL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Snowflake i.e., Snowflake and GENERAL go up and down completely randomly.
Pair Corralation between Snowflake and GENERAL
Given the investment horizon of 90 days Snowflake is expected to generate 2.25 times more return on investment than GENERAL. However, Snowflake is 2.25 times more volatile than GENERAL ELEC CAP. It trades about 0.26 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.29 per unit of risk. If you would invest 11,733 in Snowflake on August 27, 2024 and sell it today you would earn a total of 5,011 from holding Snowflake or generate 42.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 38.1% |
| Values | Daily Returns |
Snowflake vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Snowflake |
| GENERAL ELEC CAP |
Snowflake and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and GENERAL
The main advantage of trading using opposite Snowflake and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.The idea behind Snowflake and GENERAL ELEC CAP 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.| GENERAL vs. AEP TEX INC | GENERAL vs. US BANK NATIONAL | GENERAL vs. Eat Beyond Global | GENERAL vs. Charles Schwab 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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