Correlation Between Snowflake and Bill

Can any of the company-specific risk be diversified away by investing in both Snowflake and Bill 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 Bill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Snowflake and Bill Com Holdings, you can compare the effects of market volatilities on Snowflake and Bill 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 Bill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Bill.

Diversification Opportunities for Snowflake and Bill

0.84

Correlation Coefficient

Snowflake  Bill

Very poor diversification

The 3 months correlation between Snowflake and Bill is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com 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 Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Snowflake i.e., Snowflake and Bill go up and down completely randomly.

Pair Corralation between Snowflake and Bill

Given the investment horizon of 90 days Snowflake is expected to generate 0.63 times more return on investment than Bill. However, Snowflake is 1.59 times less risky than Bill. It trades about 0.27 of its potential returns per unit of risk. Bill Com Holdings is currently generating about 0.0 per unit of risk. If you would invest  16,144  in Snowflake on October 23, 2024 and sell it today you would earn a total of  1,348  from holding Snowflake or generate 8.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.74%
Values	Daily Returns

Snowflake  vs.  Bill Com Holdings

Snowflake

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Snowflake are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Snowflake showed solid returns over the last few months and may actually be approaching a breakup point.

Bill Com Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Snowflake and Bill

The main advantage of trading using opposite Snowflake and Bill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Bill 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 Bill will offset losses from the drop in Bill's long position.

The idea behind Snowflake and Bill Com 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.