Correlation Between ServiceNow and Zijin Mining
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Zijin Mining 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 Zijin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Zijin Mining Group, you can compare the effects of market volatilities on ServiceNow and Zijin Mining 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 Zijin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Zijin Mining.
Diversification Opportunities for ServiceNow and Zijin Mining
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ServiceNow and Zijin is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Zijin Mining Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zijin Mining 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 Zijin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zijin Mining Group has no effect on the direction of ServiceNow i.e., ServiceNow and Zijin Mining go up and down completely randomly.
Pair Corralation between ServiceNow and Zijin Mining
Considering the 90-day investment horizon ServiceNow is expected to generate 0.44 times more return on investment than Zijin Mining. However, ServiceNow is 2.29 times less risky than Zijin Mining. It trades about 0.37 of its potential returns per unit of risk. Zijin Mining Group is currently generating about -0.17 per unit of risk. If you would invest 93,299 in ServiceNow on September 1, 2024 and sell it today you would earn a total of 11,645 from holding ServiceNow or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Zijin Mining Group
Performance |
| Timeline |
| ServiceNow |
| Zijin Mining Group |
ServiceNow and Zijin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Zijin Mining
The main advantage of trading using opposite ServiceNow and Zijin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Zijin Mining 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 Zijin Mining will offset losses from the drop in Zijin Mining's long position.| ServiceNow vs. Datadog | ServiceNow vs. Gitlab Inc | ServiceNow vs. Atlassian Corp Plc | ServiceNow vs. HubSpot |
| Zijin Mining vs. Aurion Resources | Zijin Mining vs. Rio2 Limited | Zijin Mining vs. Palamina Corp | Zijin Mining vs. BTU Metals 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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