Correlation Between ServiceNow and Consol Energy
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Consol Energy 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 Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Consol Energy, you can compare the effects of market volatilities on ServiceNow and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Consol Energy.
Diversification Opportunities for ServiceNow and Consol Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ServiceNow and Consol is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of ServiceNow i.e., ServiceNow and Consol Energy go up and down completely randomly.
Pair Corralation between ServiceNow and Consol Energy
Considering the 90-day investment horizon ServiceNow is expected to generate 0.78 times more return on investment than Consol Energy. However, ServiceNow is 1.28 times less risky than Consol Energy. It trades about 0.09 of its potential returns per unit of risk. Consol Energy is currently generating about 0.06 per unit of risk. If you would invest 46,104 in ServiceNow on November 2, 2024 and sell it today you would earn a total of 56,882 from holding ServiceNow or generate 123.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.77% |
| Values | Daily Returns |
ServiceNow vs. Consol Energy
Performance |
| Timeline |
| ServiceNow |
| Consol Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ServiceNow and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Consol Energy
The main advantage of trading using opposite ServiceNow and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy's long position.| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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