Correlation Between ServiceNow and INTNED

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

By analyzing existing cross correlation between ServiceNow and INTNED 4625 06 JAN 26, you can compare the effects of market volatilities on ServiceNow and INTNED 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 INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and INTNED.

Diversification Opportunities for ServiceNow and INTNED

-0.31

Correlation Coefficient

ServiceNow  INTNED

Very good diversification

The 3 months correlation between ServiceNow and INTNED is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and INTNED 4625 06 JAN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 4625 06 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 INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 4625 06 has no effect on the direction of ServiceNow i.e., ServiceNow and INTNED go up and down completely randomly.

Pair Corralation between ServiceNow and INTNED

Considering the 90-day investment horizon ServiceNow is expected to generate 5.38 times more return on investment than INTNED. However, ServiceNow is 5.38 times more volatile than INTNED 4625 06 JAN 26. It trades about 0.14 of its potential returns per unit of risk. INTNED 4625 06 JAN 26 is currently generating about -0.18 per unit of risk. If you would invest  97,104  in ServiceNow on October 6, 2024 and sell it today you would earn a total of  10,273  from holding ServiceNow or generate 10.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.98%
Values	Daily Returns

ServiceNow  vs.  INTNED 4625 06 JAN 26

ServiceNow

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ServiceNow are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, ServiceNow showed solid returns over the last few months and may actually be approaching a breakup point.

INTNED 4625 06

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 4625 06 JAN 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ServiceNow and INTNED

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

The idea behind ServiceNow and INTNED 4625 06 JAN 26 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.