Correlation Between Intuit and Snowflake

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

By analyzing existing cross correlation between Intuit Inc and Snowflake, you can compare the effects of market volatilities on Intuit and Snowflake 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 Intuit with a short position of Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuit and Snowflake.

Diversification Opportunities for Intuit and Snowflake

0.56

Correlation Coefficient

Intuit  Snowflake

Very weak diversification

The 3 months correlation between Intuit and Snowflake is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and Intuit 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 Intuit Inc are associated (or correlated) with Snowflake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snowflake has no effect on the direction of Intuit i.e., Intuit and Snowflake go up and down completely randomly.

Pair Corralation between Intuit and Snowflake

Given the investment horizon of 90 days Intuit Inc is expected to under-perform the Snowflake. But the stock apears to be less risky and, when comparing its historical volatility, Intuit Inc is 1.47 times less risky than Snowflake. The stock trades about -0.05 of its potential returns per unit of risk. The Snowflake is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  15,558  in Snowflake on February 9, 2024 and sell it today you would earn a total of  203.00  from holding Snowflake or generate 1.3% return on investment over 90 days.

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

Intuit Inc  vs.  Snowflake

Intuit Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Snowflake

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snowflake has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Intuit and Snowflake

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

The idea behind Intuit Inc and Snowflake 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.