Correlation Between Snowflake and Infobird

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

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

Diversification Opportunities for Snowflake and Infobird

0.61

Correlation Coefficient

Snowflake  Infobird

Poor diversification

The 3 months correlation between Snowflake and Infobird is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Infobird Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infobird 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 Infobird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infobird has no effect on the direction of Snowflake i.e., Snowflake and Infobird go up and down completely randomly.

Pair Corralation between Snowflake and Infobird

Given the investment horizon of 90 days Snowflake is expected to generate 1.04 times less return on investment than Infobird. But when comparing it to its historical volatility, Snowflake is 1.8 times less risky than Infobird. It trades about 0.14 of its potential returns per unit of risk. Infobird Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  202.00  in Infobird Co on October 1, 2024 and sell it today you would earn a total of  56.00  from holding Infobird Co or generate 27.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Snowflake  vs.  Infobird Co

Snowflake

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Snowflake are ranked lower than 11 (%) 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.

Infobird

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infobird Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Infobird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Snowflake and Infobird

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

The idea behind Snowflake and Infobird Co 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.