Correlation Between ServiceNow and Wishpond Technologies
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Wishpond Technologies 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 Wishpond Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Wishpond Technologies, you can compare the effects of market volatilities on ServiceNow and Wishpond Technologies 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 Wishpond Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Wishpond Technologies.
Diversification Opportunities for ServiceNow and Wishpond Technologies
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ServiceNow and Wishpond is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Wishpond Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wishpond Technologies 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 Wishpond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wishpond Technologies has no effect on the direction of ServiceNow i.e., ServiceNow and Wishpond Technologies go up and down completely randomly.
Pair Corralation between ServiceNow and Wishpond Technologies
Considering the 90-day investment horizon ServiceNow is expected to generate 0.37 times more return on investment than Wishpond Technologies. However, ServiceNow is 2.73 times less risky than Wishpond Technologies. It trades about 0.25 of its potential returns per unit of risk. Wishpond Technologies is currently generating about -0.12 per unit of risk. If you would invest 81,411 in ServiceNow on August 28, 2024 and sell it today you would earn a total of 23,860 from holding ServiceNow or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
ServiceNow vs. Wishpond Technologies
Performance |
| Timeline |
| ServiceNow |
| Wishpond Technologies |
ServiceNow and Wishpond Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Wishpond Technologies
The main advantage of trading using opposite ServiceNow and Wishpond Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Wishpond Technologies 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 Wishpond Technologies will offset losses from the drop in Wishpond Technologies' long position.| ServiceNow vs. Alkami Technology | ServiceNow vs. ADEIA P | ServiceNow vs. Paycor HCM | ServiceNow vs. Envestnet |
| Wishpond Technologies vs. Salesforce | Wishpond Technologies vs. SAP SE ADR | Wishpond Technologies vs. ServiceNow | Wishpond Technologies vs. Intuit Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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