Correlation Between ServiceNow and Hesai Group
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Hesai Group American, you can compare the effects of market volatilities on ServiceNow and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Hesai Group.
Diversification Opportunities for ServiceNow and Hesai Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ServiceNow and Hesai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of ServiceNow i.e., ServiceNow and Hesai Group go up and down completely randomly.
Pair Corralation between ServiceNow and Hesai Group
Considering the 90-day investment horizon ServiceNow is expected to generate 10.33 times less return on investment than Hesai Group. But when comparing it to its historical volatility, ServiceNow is 22.84 times less risky than Hesai Group. It trades about 0.1 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Hesai Group American on September 3, 2024 and sell it today you would earn a total of 818.00 from holding Hesai Group American or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.32% |
| Values | Daily Returns |
ServiceNow vs. Hesai Group American
Performance |
| Timeline |
| ServiceNow |
| Hesai Group American |
ServiceNow and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Hesai Group
The main advantage of trading using opposite ServiceNow and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.The idea behind ServiceNow and Hesai Group American pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hesai Group vs. Sapiens International | Hesai Group vs. FactSet Research Systems | Hesai Group vs. ServiceNow | Hesai Group vs. Doubledown Interactive Co |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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