Correlation Between WiMi Hologram and ServiceNow

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

By analyzing existing cross correlation between WiMi Hologram Cloud and ServiceNow, you can compare the effects of market volatilities on WiMi Hologram 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 WiMi Hologram with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiMi Hologram and ServiceNow.

Diversification Opportunities for WiMi Hologram and ServiceNow

0.04

Correlation Coefficient

WiMi Hologram  ServiceNow

Significant diversification

The 3 months correlation between WiMi and ServiceNow is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and WiMi Hologram 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 WiMi Hologram Cloud 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 WiMi Hologram i.e., WiMi Hologram and ServiceNow go up and down completely randomly.

Pair Corralation between WiMi Hologram and ServiceNow

Given the investment horizon of 90 days WiMi Hologram Cloud is expected to generate 6.6 times more return on investment than ServiceNow. However, WiMi Hologram is 6.6 times more volatile than ServiceNow. It trades about 0.06 of its potential returns per unit of risk. ServiceNow is currently generating about -0.07 per unit of risk. If you would invest  83.00  in WiMi Hologram Cloud on November 29, 2024 and sell it today you would lose (3.00) from holding WiMi Hologram Cloud or give up 3.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

WiMi Hologram Cloud  vs.  ServiceNow

WiMi Hologram Cloud

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, WiMi Hologram demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with WiMi Hologram and ServiceNow

The main advantage of trading using opposite WiMi Hologram and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiMi Hologram 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 WiMi Hologram Cloud 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.