Correlation Between ServiceNow and TrustBIX

Can any of the company-specific risk be diversified away by investing in both ServiceNow and TrustBIX 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 TrustBIX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ServiceNow and TrustBIX, you can compare the effects of market volatilities on ServiceNow and TrustBIX 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 TrustBIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and TrustBIX.

Diversification Opportunities for ServiceNow and TrustBIX

0.49

Correlation Coefficient

ServiceNow  TrustBIX

Very weak diversification

The 3 months correlation between ServiceNow and TrustBIX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and TrustBIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrustBIX 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 TrustBIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrustBIX has no effect on the direction of ServiceNow i.e., ServiceNow and TrustBIX go up and down completely randomly.

Pair Corralation between ServiceNow and TrustBIX

Considering the 90-day investment horizon ServiceNow is expected to generate 0.22 times more return on investment than TrustBIX. However, ServiceNow is 4.62 times less risky than TrustBIX. It trades about -0.07 of its potential returns per unit of risk. TrustBIX is currently generating about -0.09 per unit of risk. If you would invest  104,843  in ServiceNow on December 2, 2024 and sell it today you would lose (11,867) from holding ServiceNow or give up 11.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.85%
Values	Daily Returns

ServiceNow  vs.  TrustBIX

ServiceNow

Risk-Adjusted Performance

Very Weak

Over the last 90 days ServiceNow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

TrustBIX

Risk-Adjusted Performance

Very Weak

Over the last 90 days TrustBIX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ServiceNow and TrustBIX

The main advantage of trading using opposite ServiceNow and TrustBIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, TrustBIX 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 TrustBIX will offset losses from the drop in TrustBIX's long position.

The idea behind ServiceNow and TrustBIX 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.