Correlation Between ServiceNow and Gap,
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Gap, 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 Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and The Gap,, you can compare the effects of market volatilities on ServiceNow and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Gap,.
Diversification Opportunities for ServiceNow and Gap,
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ServiceNow and Gap, is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of ServiceNow i.e., ServiceNow and Gap, go up and down completely randomly.
Pair Corralation between ServiceNow and Gap,
Considering the 90-day investment horizon ServiceNow is expected to generate 1.63 times less return on investment than Gap,. But when comparing it to its historical volatility, ServiceNow is 1.8 times less risky than Gap,. It trades about 0.1 of its potential returns per unit of risk. The Gap, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 893.00 in The Gap, on August 31, 2024 and sell it today you would earn a total of 1,532 from holding The Gap, or generate 171.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. The Gap,
Performance |
| Timeline |
| ServiceNow |
| Gap, |
ServiceNow and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Gap,
The main advantage of trading using opposite ServiceNow and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
| Gap, vs. SEI Investments | Gap, vs. Corporacion America Airports | Gap, vs. Nasdaq Inc | Gap, vs. Sabra Healthcare REIT |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |