Correlation Between FTAC Emerald and ServiceNow
Can any of the company-specific risk be diversified away by investing in both FTAC Emerald 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 FTAC Emerald and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAC Emerald Acquisition and ServiceNow, you can compare the effects of market volatilities on FTAC Emerald 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 FTAC Emerald with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAC Emerald and ServiceNow.
Diversification Opportunities for FTAC Emerald and ServiceNow
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FTAC and ServiceNow is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding FTAC Emerald Acquisition and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and FTAC Emerald 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 FTAC Emerald Acquisition 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 FTAC Emerald i.e., FTAC Emerald and ServiceNow go up and down completely randomly.
Pair Corralation between FTAC Emerald and ServiceNow
Assuming the 90 days horizon FTAC Emerald Acquisition is expected to generate 17.46 times more return on investment than ServiceNow. However, FTAC Emerald is 17.46 times more volatile than ServiceNow. It trades about 0.35 of its potential returns per unit of risk. ServiceNow is currently generating about 0.31 per unit of risk. If you would invest 17.00 in FTAC Emerald Acquisition on September 3, 2024 and sell it today you would earn a total of 53.00 from holding FTAC Emerald Acquisition or generate 311.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAC Emerald Acquisition vs. ServiceNow
Performance |
| Timeline |
| FTAC Emerald Acquisition |
| ServiceNow |
FTAC Emerald and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAC Emerald and ServiceNow
The main advantage of trading using opposite FTAC Emerald and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAC Emerald 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.| FTAC Emerald vs. Distoken Acquisition | FTAC Emerald vs. Voyager Acquisition Corp | FTAC Emerald vs. dMY Squared Technology | FTAC Emerald vs. YHN Acquisition I |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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