Correlation Between Snowflake and Lyxor 1

Can any of the company-specific risk be diversified away by investing in both Snowflake and Lyxor 1 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 Lyxor 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Snowflake and Lyxor 1 , you can compare the effects of market volatilities on Snowflake and Lyxor 1 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 Lyxor 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Lyxor 1.

Diversification Opportunities for Snowflake and Lyxor 1

0.85

Correlation Coefficient

Snowflake  Lyxor 1

Very poor diversification

The 3 months correlation between Snowflake and Lyxor is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Lyxor 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 1 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 Lyxor 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 1 has no effect on the direction of Snowflake i.e., Snowflake and Lyxor 1 go up and down completely randomly.

Pair Corralation between Snowflake and Lyxor 1

Assuming the 90 days horizon Snowflake is expected to generate 2.99 times more return on investment than Lyxor 1. However, Snowflake is 2.99 times more volatile than Lyxor 1 . It trades about 0.2 of its potential returns per unit of risk. Lyxor 1 is currently generating about 0.19 per unit of risk. If you would invest  13,154  in Snowflake on April 23, 2025 and sell it today you would earn a total of  4,996  from holding Snowflake or generate 37.98% return on investment over 90 days.

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

Snowflake  vs.  Lyxor 1

Snowflake

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Snowflake are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Snowflake reported solid returns over the last few months and may actually be approaching a breakup point.

Lyxor 1

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lyxor 1 may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Snowflake and Lyxor 1

The main advantage of trading using opposite Snowflake and Lyxor 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Lyxor 1 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 Lyxor 1 will offset losses from the drop in Lyxor 1's long position.

The idea behind Snowflake and Lyxor 1 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.