Correlation Between ServiceNow and Lucid
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Lucid 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 Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Lucid Group, you can compare the effects of market volatilities on ServiceNow and Lucid 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 Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Lucid.
Diversification Opportunities for ServiceNow and Lucid
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ServiceNow and Lucid is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of ServiceNow i.e., ServiceNow and Lucid go up and down completely randomly.
Pair Corralation between ServiceNow and Lucid
Considering the 90-day investment horizon ServiceNow is expected to under-perform the Lucid. But the stock apears to be less risky and, when comparing its historical volatility, ServiceNow is 2.02 times less risky than Lucid. The stock trades about -0.29 of its potential returns per unit of risk. The Lucid Group is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 275.00 in Lucid Group on November 28, 2024 and sell it today you would lose (49.50) from holding Lucid Group or give up 18.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Lucid Group
Performance |
| Timeline |
| ServiceNow |
| Lucid Group |
ServiceNow and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Lucid
The main advantage of trading using opposite ServiceNow and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| ServiceNow vs. Autodesk | ServiceNow vs. Intuit Inc | ServiceNow vs. Zoom Video Communications | ServiceNow vs. Snowflake |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |