Correlation Between AES Corp and ServiceNow
Can any of the company-specific risk be diversified away by investing in both AES Corp and ServiceNow 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 AES Corp and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AES Corp Unit and ServiceNow, you can compare the effects of market volatilities on AES Corp and ServiceNow 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 AES Corp with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES Corp and ServiceNow.
Diversification Opportunities for AES Corp and ServiceNow
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between AES and ServiceNow is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding AES Corp Unit and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and AES Corp 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 AES Corp Unit are associated (or correlated) with ServiceNow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServiceNow has no effect on the direction of AES Corp i.e., AES Corp and ServiceNow go up and down completely randomly.
Pair Corralation between AES Corp and ServiceNow
If you would invest 94,341 in ServiceNow on September 2, 2024 and sell it today you would earn a total of 10,603 from holding ServiceNow or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
AES Corp Unit vs. ServiceNow
Performance |
| Timeline |
| AES Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ServiceNow |
AES Corp and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES Corp and ServiceNow
The main advantage of trading using opposite AES Corp and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES Corp position performs unexpectedly, ServiceNow 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 ServiceNow will offset losses from the drop in ServiceNow's long position.| AES Corp vs. Contagious Gaming | AES Corp vs. Avient Corp | AES Corp vs. NetEase | AES Corp vs. Amkor Technology |
| ServiceNow vs. Datadog | ServiceNow vs. Gitlab Inc | ServiceNow vs. Atlassian Corp Plc | ServiceNow vs. HubSpot |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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