Correlation Between ServiceNow and Absolute Capital

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

By analyzing existing cross correlation between ServiceNow and Absolute Capital Asset, you can compare the effects of market volatilities on ServiceNow and Absolute Capital 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 Absolute Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ServiceNow and Absolute Capital.

Diversification Opportunities for ServiceNow and Absolute Capital

0.21

Correlation Coefficient

ServiceNow  Absolute Capital

Modest diversification

The 3 months correlation between ServiceNow and Absolute is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ServiceNow and Absolute Capital Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Capital Asset 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 Absolute Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Capital Asset has no effect on the direction of ServiceNow i.e., ServiceNow and Absolute Capital go up and down completely randomly.

Pair Corralation between ServiceNow and Absolute Capital

Considering the 90-day investment horizon ServiceNow is expected to under-perform the Absolute Capital. In addition to that, ServiceNow is 2.61 times more volatile than Absolute Capital Asset. It trades about -0.1 of its total potential returns per unit of risk. Absolute Capital Asset is currently generating about 0.08 per unit of volatility. If you would invest  1,232  in Absolute Capital Asset on September 3, 2025 and sell it today you would earn a total of  36.00  from holding Absolute Capital Asset or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

ServiceNow  vs.  Absolute Capital Asset

ServiceNow

Risk-Adjusted Performance

Weakest

Over the last 90 days ServiceNow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Absolute Capital Asset

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Absolute Capital Asset are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Absolute Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ServiceNow and Absolute Capital

The main advantage of trading using opposite ServiceNow and Absolute Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ServiceNow position performs unexpectedly, Absolute Capital 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 Absolute Capital will offset losses from the drop in Absolute Capital's long position.

The idea behind ServiceNow and Absolute Capital Asset 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.