Correlation Between Stagwell and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Stagwell 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 Stagwell and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and ServiceNow, you can compare the effects of market volatilities on Stagwell 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 Stagwell with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and ServiceNow.
Diversification Opportunities for Stagwell and ServiceNow
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stagwell and ServiceNow is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and ServiceNow go up and down completely randomly.
Pair Corralation between Stagwell and ServiceNow
Given the investment horizon of 90 days Stagwell is expected to generate 1.62 times more return on investment than ServiceNow. However, Stagwell is 1.62 times more volatile than ServiceNow. It trades about 0.36 of its potential returns per unit of risk. ServiceNow is currently generating about 0.31 per unit of risk. If you would invest 659.00 in Stagwell on September 3, 2024 and sell it today you would earn a total of 127.00 from holding Stagwell or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. ServiceNow
Performance |
| Timeline |
| Stagwell |
| ServiceNow |
Stagwell and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and ServiceNow
The main advantage of trading using opposite Stagwell and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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.| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Omnicom Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |