Correlation Between AOYAMA TRADING and S A P
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and S A P 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 AOYAMA TRADING and S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and SAP SE, you can compare the effects of market volatilities on AOYAMA TRADING and S A P 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 AOYAMA TRADING with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and S A P.
Diversification Opportunities for AOYAMA TRADING and S A P
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AOYAMA and SAP is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and S A P go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and S A P
Assuming the 90 days horizon AOYAMA TRADING is expected to under-perform the S A P. In addition to that, AOYAMA TRADING is 1.05 times more volatile than SAP SE. It trades about -0.16 of its total potential returns per unit of risk. SAP SE is currently generating about 0.2 per unit of volatility. If you would invest 26,100 in SAP SE on November 27, 2024 and sell it today you would earn a total of 1,120 from holding SAP SE or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. SAP SE
Performance |
| Timeline |
| AOYAMA TRADING |
| SAP SE |
AOYAMA TRADING and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and S A P
The main advantage of trading using opposite AOYAMA TRADING and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.| AOYAMA TRADING vs. Information Services International Dentsu | AOYAMA TRADING vs. AIR PRODCHEMICALS | AOYAMA TRADING vs. DATAGROUP SE | AOYAMA TRADING vs. Siamgas And Petrochemicals |
| S A P vs. Cairo Communication SpA | S A P vs. LEONS FURNITURE | S A P vs. ADDUS HOMECARE | S A P vs. BOVIS HOMES GROUP |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |