Correlation Between ServiceNow and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Metropolitan Bank 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 Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Metropolitan Bank and, you can compare the effects of market volatilities on ServiceNow and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Metropolitan Bank.
Diversification Opportunities for ServiceNow and Metropolitan Bank
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ServiceNow and Metropolitan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Metropolitan Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank has no effect on the direction of ServiceNow i.e., ServiceNow and Metropolitan Bank go up and down completely randomly.
Pair Corralation between ServiceNow and Metropolitan Bank
If you would invest 94,341 in ServiceNow on September 2, 2024 and sell it today you would earn a total of 10,603 from holding ServiceNow or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
ServiceNow vs. Metropolitan Bank and
Performance |
| Timeline |
| ServiceNow |
| Metropolitan Bank |
ServiceNow and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Metropolitan Bank
The main advantage of trading using opposite ServiceNow and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| ServiceNow vs. Datadog | ServiceNow vs. Gitlab Inc | ServiceNow vs. Atlassian Corp Plc | ServiceNow vs. HubSpot |
| Metropolitan Bank vs. Piraeus Bank SA | Metropolitan Bank vs. Turkiye Garanti Bankasi | Metropolitan Bank vs. Uwharrie Capital 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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