Correlation Between Alkami Technology and S A P
Can any of the company-specific risk be diversified away by investing in both Alkami Technology 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 Alkami Technology 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 Alkami Technology and SAP SE ADR, you can compare the effects of market volatilities on Alkami Technology 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 Alkami Technology with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkami Technology and S A P.
Diversification Opportunities for Alkami Technology and S A P
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alkami and SAP is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alkami Technology and SAP SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE ADR and Alkami Technology 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 Alkami Technology 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 ADR has no effect on the direction of Alkami Technology i.e., Alkami Technology and S A P go up and down completely randomly.
Pair Corralation between Alkami Technology and S A P
Given the investment horizon of 90 days Alkami Technology is expected to generate 1.55 times more return on investment than S A P. However, Alkami Technology is 1.55 times more volatile than SAP SE ADR. It trades about 0.11 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.12 per unit of risk. If you would invest 2,264 in Alkami Technology on August 24, 2024 and sell it today you would earn a total of 1,789 from holding Alkami Technology or generate 79.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alkami Technology vs. SAP SE ADR
Performance |
| Timeline |
| Alkami Technology |
| SAP SE ADR |
Alkami Technology and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkami Technology and S A P
The main advantage of trading using opposite Alkami Technology and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkami Technology 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.| Alkami Technology vs. Agilysys | Alkami Technology vs. ADEIA P | Alkami Technology vs. Paycor HCM | Alkami Technology vs. Paylocity Holdng |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |