Correlation Between Live Ventures and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Live Ventures 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 Live Ventures and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Ventures and ServiceNow, you can compare the effects of market volatilities on Live Ventures 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 Live Ventures with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Ventures and ServiceNow.
Diversification Opportunities for Live Ventures and ServiceNow
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and ServiceNow is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Live Ventures and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and Live Ventures 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 Live Ventures 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 Live Ventures i.e., Live Ventures and ServiceNow go up and down completely randomly.
Pair Corralation between Live Ventures and ServiceNow
Given the investment horizon of 90 days Live Ventures is expected to under-perform the ServiceNow. In addition to that, Live Ventures is 2.67 times more volatile than ServiceNow. It trades about -0.14 of its total potential returns per unit of risk. ServiceNow is currently generating about 0.39 per unit of volatility. If you would invest 94,500 in ServiceNow on August 29, 2024 and sell it today you would earn a total of 12,507 from holding ServiceNow or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Ventures vs. ServiceNow
Performance |
| Timeline |
| Live Ventures |
| ServiceNow |
Live Ventures and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Ventures and ServiceNow
The main advantage of trading using opposite Live Ventures and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Ventures 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.| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kingfisher plc |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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