Correlation Between ServiceNow and Intel
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Intel 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 Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Intel, you can compare the effects of market volatilities on ServiceNow and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Intel.
Diversification Opportunities for ServiceNow and Intel
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ServiceNow and Intel is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of ServiceNow i.e., ServiceNow and Intel go up and down completely randomly.
Pair Corralation between ServiceNow and Intel
Considering the 90-day investment horizon ServiceNow is expected to generate 0.42 times more return on investment than Intel. However, ServiceNow is 2.38 times less risky than Intel. It trades about 0.36 of its potential returns per unit of risk. Intel is currently generating about 0.12 per unit of risk. If you would invest 95,085 in ServiceNow on August 26, 2024 and sell it today you would earn a total of 10,975 from holding ServiceNow or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Intel
Performance |
| Timeline |
| ServiceNow |
| Intel |
ServiceNow and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Intel
The main advantage of trading using opposite ServiceNow and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| ServiceNow vs. Alkami Technology | ServiceNow vs. ADEIA P | ServiceNow vs. Paycor HCM | ServiceNow vs. Envestnet |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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