Correlation Between ServiceNow and ZJK Industrial

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

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

Diversification Opportunities for ServiceNow and ZJK Industrial

0.48

Correlation Coefficient

ServiceNow  ZJK Industrial

Very weak diversification

The 3 months correlation between ServiceNow and ZJK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and ZJK Industrial Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZJK Industrial Co, 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 ZJK Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZJK Industrial Co, has no effect on the direction of ServiceNow i.e., ServiceNow and ZJK Industrial go up and down completely randomly.

Pair Corralation between ServiceNow and ZJK Industrial

Considering the 90-day investment horizon ServiceNow is expected to generate 0.32 times more return on investment than ZJK Industrial. However, ServiceNow is 3.16 times less risky than ZJK Industrial. It trades about -0.16 of its potential returns per unit of risk. ZJK Industrial Co, is currently generating about -0.06 per unit of risk. If you would invest  107,487  in ServiceNow on December 19, 2024 and sell it today you would lose (24,487) from holding ServiceNow or give up 22.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

ServiceNow  vs.  ZJK Industrial Co,

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 conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

ZJK Industrial Co,

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZJK Industrial Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward-looking indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with ServiceNow and ZJK Industrial

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

The idea behind ServiceNow and ZJK Industrial Co, 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..