Correlation Between ServiceNow and PDD Holdings
Can any of the company-specific risk be diversified away by investing in both ServiceNow and PDD Holdings 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 PDD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ServiceNow and PDD Holdings, you can compare the effects of market volatilities on ServiceNow and PDD Holdings 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 PDD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and PDD Holdings.
Diversification Opportunities for ServiceNow and PDD Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ServiceNow and PDD is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and PDD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDD Holdings 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 PDD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDD Holdings has no effect on the direction of ServiceNow i.e., ServiceNow and PDD Holdings go up and down completely randomly.
Pair Corralation between ServiceNow and PDD Holdings
Considering the 90-day investment horizon ServiceNow is expected to under-perform the PDD Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ServiceNow is 1.18 times less risky than PDD Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The PDD Holdings is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 12,468 in PDD Holdings on September 5, 2025 and sell it today you would lose (748.00) from holding PDD Holdings or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ServiceNow vs. PDD Holdings
Performance |
| Timeline |
| ServiceNow |
| PDD Holdings |
ServiceNow and PDD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ServiceNow and PDD Holdings
The main advantage of trading using opposite ServiceNow and PDD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, PDD Holdings 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 PDD Holdings will offset losses from the drop in PDD Holdings' long position.| ServiceNow vs. Alibaba Health Information | ServiceNow vs. Ion Beam Applications | ServiceNow vs. Academy Sports Outdoors | ServiceNow vs. Data3 Limited |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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