Correlation Between ServiceNow and Snowflake
Can any of the company-specific risk be diversified away by investing in both ServiceNow 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 ServiceNow and Snowflake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Snowflake, you can compare the effects of market volatilities on ServiceNow 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 ServiceNow with a short position of Snowflake. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Snowflake.
Diversification Opportunities for ServiceNow and Snowflake
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ServiceNow and Snowflake is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Snowflake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snowflake and ServiceNow 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 ServiceNow 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 ServiceNow i.e., ServiceNow and Snowflake go up and down completely randomly.
Pair Corralation between ServiceNow and Snowflake
Considering the 90-day investment horizon ServiceNow is expected to generate 2.46 times less return on investment than Snowflake. But when comparing it to its historical volatility, ServiceNow is 1.22 times less risky than Snowflake. It trades about 0.06 of its potential returns per unit of risk. Snowflake is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 14,759 in Snowflake on June 8, 2025 and sell it today you would earn a total of 7,799 from holding Snowflake or generate 52.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Snowflake
Performance |
| Timeline |
| ServiceNow |
| Snowflake |
ServiceNow and Snowflake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Snowflake
The main advantage of trading using opposite ServiceNow and Snowflake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow 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.| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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