Correlation Between Servicenow and SAP Ag

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

Specify exactly 2 symbols:

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

Diversification Opportunities for Servicenow and SAP Ag

0.53
  Correlation Coefficient
Servicenow
SAP Ag Systeme

Very weak diversification

The 3 months correlation between Servicenow and SAPGF is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Servicenow and SAP Ag Systeme in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on SAP Ag Systeme 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 SAP Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP Ag Systeme has no effect on the direction of Servicenow i.e., Servicenow and SAP Ag go up and down completely randomly.

Pair Corralation between Servicenow and SAP Ag

Considering the 90-day investment horizon Servicenow is expected to generate 0.37 times more return on investment than SAP Ag. However, Servicenow is 2.67 times less risky than SAP Ag. It trades about 0.37 of its potential returns per unit of risk. SAP Ag Systeme is currently generating about 0.03 per unit of risk. If you would invest  54,955  in Servicenow on May 1, 2021 and sell it today you would earn a total of  3,834  from holding Servicenow or generate 6.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Servicenow  vs.  SAP Ag Systeme

 Performance (%) 
      Timeline 
Servicenow 
 Servicenow Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Servicenow are ranked lower than 14 (%) 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.

Servicenow Price Channel

SAP Ag Systeme 
 SAPGF Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in SAP Ag Systeme are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, SAP Ag is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

SAPGF Price Channel

Servicenow and SAP Ag Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Servicenow and SAP Ag

The main advantage of trading using opposite Servicenow and SAP Ag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Servicenow position performs unexpectedly, SAP Ag 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 SAP Ag will offset losses from the drop in SAP Ag's long position.
The idea behind Servicenow and SAP Ag Systeme 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Equity Search
Search for activelly traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go