Correlation Between BOS Better and ServiceNow
Can any of the company-specific risk be diversified away by investing in both BOS Better 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 BOS Better and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOS Better Online and ServiceNow, you can compare the effects of market volatilities on BOS Better 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 BOS Better with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and ServiceNow.
Diversification Opportunities for BOS Better and ServiceNow
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BOS and ServiceNow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and ServiceNow go up and down completely randomly.
Pair Corralation between BOS Better and ServiceNow
Given the investment horizon of 90 days BOS Better is expected to generate 1.51 times less return on investment than ServiceNow. But when comparing it to its historical volatility, BOS Better Online is 1.17 times less risky than ServiceNow. It trades about 0.07 of its potential returns per unit of risk. ServiceNow is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 69,908 in ServiceNow on September 3, 2024 and sell it today you would earn a total of 34,935 from holding ServiceNow or generate 49.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. ServiceNow
Performance |
| Timeline |
| BOS Better Online |
| ServiceNow |
BOS Better and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and ServiceNow
The main advantage of trading using opposite BOS Better and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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.| BOS Better vs. Highway Holdings Limited | BOS Better vs. QCR Holdings | BOS Better vs. Partner Communications | BOS Better vs. Acumen Pharmaceuticals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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