Correlation Between ServiceNow and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Senmiao Technology 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 Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Senmiao Technology, you can compare the effects of market volatilities on ServiceNow and Senmiao Technology 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 Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Senmiao Technology.
Diversification Opportunities for ServiceNow and Senmiao Technology
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ServiceNow and Senmiao is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology 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 Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of ServiceNow i.e., ServiceNow and Senmiao Technology go up and down completely randomly.
Pair Corralation between ServiceNow and Senmiao Technology
Considering the 90-day investment horizon ServiceNow is expected to generate 0.34 times more return on investment than Senmiao Technology. However, ServiceNow is 2.92 times less risky than Senmiao Technology. It trades about 0.35 of its potential returns per unit of risk. Senmiao Technology is currently generating about 0.09 per unit of risk. If you would invest 94,500 in ServiceNow on August 28, 2024 and sell it today you would earn a total of 10,771 from holding ServiceNow or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Senmiao Technology
Performance |
| Timeline |
| ServiceNow |
| Senmiao Technology |
ServiceNow and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Senmiao Technology
The main advantage of trading using opposite ServiceNow and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| ServiceNow vs. Alkami Technology | ServiceNow vs. ADEIA P | ServiceNow vs. Paycor HCM | ServiceNow vs. Envestnet |
| Senmiao Technology vs. X Financial Class | Senmiao Technology vs. Yirendai | Senmiao Technology vs. Pintec Technology Holdings | Senmiao Technology vs. Qudian Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |