Correlation Between ServiceNow and HNI Corp
Can any of the company-specific risk be diversified away by investing in both ServiceNow and HNI Corp 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 HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and HNI Corp, you can compare the effects of market volatilities on ServiceNow and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and HNI Corp.
Diversification Opportunities for ServiceNow and HNI Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ServiceNow and HNI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of ServiceNow i.e., ServiceNow and HNI Corp go up and down completely randomly.
Pair Corralation between ServiceNow and HNI Corp
Considering the 90-day investment horizon ServiceNow is expected to generate 1.29 times more return on investment than HNI Corp. However, ServiceNow is 1.29 times more volatile than HNI Corp. It trades about 0.09 of its potential returns per unit of risk. HNI Corp is currently generating about 0.1 per unit of risk. If you would invest 68,768 in ServiceNow on September 2, 2024 and sell it today you would earn a total of 36,176 from holding ServiceNow or generate 52.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. HNI Corp
Performance |
| Timeline |
| ServiceNow |
| HNI Corp |
ServiceNow and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and HNI Corp
The main advantage of trading using opposite ServiceNow and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| ServiceNow vs. Datadog | ServiceNow vs. Gitlab Inc | ServiceNow vs. Atlassian Corp Plc | ServiceNow vs. HubSpot |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stocks Directory Find actively traded stocks across global markets |