Correlation Between Crowdstrike Holdings and Snowflake

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

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

Diversification Opportunities for Crowdstrike Holdings and Snowflake

0.82

Correlation Coefficient

Crowdstrike Holdings  Snowflake

Very poor diversification

The 3 months correlation between Crowdstrike and Snowflake is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Crowdstrike Holdings and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and Crowdstrike Holdings 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 Crowdstrike Holdings 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 Crowdstrike Holdings i.e., Crowdstrike Holdings and Snowflake go up and down completely randomly.

Pair Corralation between Crowdstrike Holdings and Snowflake

Given the investment horizon of 90 days Crowdstrike Holdings is expected to generate 1.36 times less return on investment than Snowflake. But when comparing it to its historical volatility, Crowdstrike Holdings is 1.02 times less risky than Snowflake. It trades about 0.19 of its potential returns per unit of risk. Snowflake is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  24,252  in Snowflake on August 5, 2025 and sell it today you would earn a total of  3,236  from holding Snowflake or generate 13.34% return on investment over 90 days.

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

Crowdstrike Holdings  vs.  Snowflake

Crowdstrike Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Crowdstrike Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Snowflake

Risk-Adjusted Performance

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 weak basic indicators, Snowflake showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crowdstrike Holdings and Snowflake

The main advantage of trading using opposite Crowdstrike Holdings and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crowdstrike Holdings 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 Crowdstrike Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.