Correlation Between ServiceNow and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both ServiceNow and Fresenius Medical 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 Fresenius Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and Fresenius Medical Care, you can compare the effects of market volatilities on ServiceNow and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Fresenius Medical.
Diversification Opportunities for ServiceNow and Fresenius Medical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ServiceNow and Fresenius is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of ServiceNow i.e., ServiceNow and Fresenius Medical go up and down completely randomly.
Pair Corralation between ServiceNow and Fresenius Medical
Considering the 90-day investment horizon ServiceNow is expected to under-perform the Fresenius Medical. But the stock apears to be less risky and, when comparing its historical volatility, ServiceNow is 1.44 times less risky than Fresenius Medical. The stock trades about -0.09 of its potential returns per unit of risk. The Fresenius Medical Care is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Fresenius Medical Care on September 11, 2025 and sell it today you would lose (140.00) from holding Fresenius Medical Care or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. Fresenius Medical Care
Performance |
| Timeline |
| ServiceNow |
| Fresenius Medical Care |
ServiceNow and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and Fresenius Medical
The main advantage of trading using opposite ServiceNow and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| ServiceNow vs. Intuit Inc | ServiceNow vs. Applovin Corp | ServiceNow vs. Uber Technologies | ServiceNow vs. Shopify |
| Fresenius Medical vs. Meli Hotels International | Fresenius Medical vs. PPHE HOTEL GROUP | Fresenius Medical vs. Scandic Hotels Group | Fresenius Medical vs. Xenia Hotels Resorts |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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