Correlation Between Nextplat Corp and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Nextplat Corp and ServiceNow 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 Nextplat Corp and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextplat Corp and ServiceNow, you can compare the effects of market volatilities on Nextplat Corp and ServiceNow 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 Nextplat Corp with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextplat Corp and ServiceNow.
Diversification Opportunities for Nextplat Corp and ServiceNow
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextplat and ServiceNow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nextplat Corp and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and Nextplat Corp 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 Nextplat Corp are associated (or correlated) with ServiceNow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ServiceNow has no effect on the direction of Nextplat Corp i.e., Nextplat Corp and ServiceNow go up and down completely randomly.
Pair Corralation between Nextplat Corp and ServiceNow
Given the investment horizon of 90 days Nextplat Corp is expected to under-perform the ServiceNow. In addition to that, Nextplat Corp is 5.06 times more volatile than ServiceNow. It trades about -0.08 of its total potential returns per unit of risk. ServiceNow is currently generating about 0.35 per unit of volatility. If you would invest 94,500 in ServiceNow on August 28, 2024 and sell it today you would earn a total of 10,771 from holding ServiceNow or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextplat Corp vs. ServiceNow
Performance |
| Timeline |
| Nextplat Corp |
| ServiceNow |
Nextplat Corp and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextplat Corp and ServiceNow
The main advantage of trading using opposite Nextplat Corp and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextplat Corp position performs unexpectedly, ServiceNow 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 ServiceNow will offset losses from the drop in ServiceNow's long position.The idea behind Nextplat Corp and ServiceNow pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |