Correlation Between ServiceNow and US Global
Can any of the company-specific risk be diversified away by investing in both ServiceNow and US Global 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 US Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and US Global Investors, you can compare the effects of market volatilities on ServiceNow and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and US Global.
Diversification Opportunities for ServiceNow and US Global
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ServiceNow and GROW is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and US Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Investors 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Investors has no effect on the direction of ServiceNow i.e., ServiceNow and US Global go up and down completely randomly.
Pair Corralation between ServiceNow and US Global
Considering the 90-day investment horizon ServiceNow is expected to generate 1.6 times more return on investment than US Global. However, ServiceNow is 1.6 times more volatile than US Global Investors. It trades about 0.09 of its potential returns per unit of risk. US Global Investors is currently generating about -0.04 per unit of risk. If you would invest 70,512 in ServiceNow on September 4, 2024 and sell it today you would earn a total of 35,220 from holding ServiceNow or generate 49.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. US Global Investors
Performance |
| Timeline |
| ServiceNow |
| US Global Investors |
ServiceNow and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and US Global
The main advantage of trading using opposite ServiceNow and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
| US Global vs. Visa Class A | US Global vs. Diamond Hill Investment | US Global vs. Associated Capital Group | US Global vs. Brookfield Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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