Correlation Between Spirit Aerosystems and ServiceNow
Can any of the company-specific risk be diversified away by investing in both Spirit Aerosystems 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 Spirit Aerosystems and ServiceNow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Aerosystems Holdings and ServiceNow, you can compare the effects of market volatilities on Spirit Aerosystems 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 Spirit Aerosystems with a short position of ServiceNow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Aerosystems and ServiceNow.
Diversification Opportunities for Spirit Aerosystems and ServiceNow
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spirit and ServiceNow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Aerosystems Holdings and ServiceNow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ServiceNow and Spirit Aerosystems 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 Spirit Aerosystems Holdings 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 Spirit Aerosystems i.e., Spirit Aerosystems and ServiceNow go up and down completely randomly.
Pair Corralation between Spirit Aerosystems and ServiceNow
Considering the 90-day investment horizon Spirit Aerosystems Holdings is expected to generate 0.77 times more return on investment than ServiceNow. However, Spirit Aerosystems Holdings is 1.3 times less risky than ServiceNow. It trades about 0.12 of its potential returns per unit of risk. ServiceNow is currently generating about -0.11 per unit of risk. If you would invest 3,786 in Spirit Aerosystems Holdings on May 31, 2025 and sell it today you would earn a total of 388.00 from holding Spirit Aerosystems Holdings or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirit Aerosystems Holdings vs. ServiceNow
Performance |
| Timeline |
| Spirit Aerosystems |
| ServiceNow |
Spirit Aerosystems and ServiceNow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Aerosystems and ServiceNow
The main advantage of trading using opposite Spirit Aerosystems and ServiceNow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Aerosystems 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.| Spirit Aerosystems vs. Textron | Spirit Aerosystems vs. Embraer SA ADR | Spirit Aerosystems vs. The Boeing | Spirit Aerosystems vs. Howmet Aerospace |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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