Correlation Between ServiceNow and FTAI Aviation
Can any of the company-specific risk be diversified away by investing in both ServiceNow and FTAI Aviation 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 FTAI Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and FTAI Aviation Ltd, you can compare the effects of market volatilities on ServiceNow and FTAI Aviation 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 FTAI Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and FTAI Aviation.
Diversification Opportunities for ServiceNow and FTAI Aviation
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ServiceNow and FTAI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and FTAI Aviation Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAI Aviation 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 FTAI Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAI Aviation has no effect on the direction of ServiceNow i.e., ServiceNow and FTAI Aviation go up and down completely randomly.
Pair Corralation between ServiceNow and FTAI Aviation
Considering the 90-day investment horizon ServiceNow is expected to generate 2.13 times more return on investment than FTAI Aviation. However, ServiceNow is 2.13 times more volatile than FTAI Aviation Ltd. It trades about 0.22 of its potential returns per unit of risk. FTAI Aviation Ltd is currently generating about 0.16 per unit of risk. If you would invest 83,586 in ServiceNow on September 2, 2024 and sell it today you would earn a total of 21,358 from holding ServiceNow or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. FTAI Aviation Ltd
Performance |
| Timeline |
| ServiceNow |
| FTAI Aviation |
ServiceNow and FTAI Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and FTAI Aviation
The main advantage of trading using opposite ServiceNow and FTAI Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, FTAI Aviation 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 FTAI Aviation will offset losses from the drop in FTAI Aviation's long position.| ServiceNow vs. Datadog | ServiceNow vs. Gitlab Inc | ServiceNow vs. Atlassian Corp Plc | ServiceNow vs. HubSpot |
| FTAI Aviation vs. SunOpta | FTAI Aviation vs. Grocery Outlet Holding | FTAI Aviation vs. SNDL Inc | FTAI Aviation vs. NH Foods Ltd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |