Correlation Between Harrow Health, and S A P
Can any of the company-specific risk be diversified away by investing in both Harrow Health, 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 Harrow Health, 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 Harrow Health, 11875 and SAP SE ADR, you can compare the effects of market volatilities on Harrow Health, 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 Harrow Health, with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harrow Health, and S A P.
Diversification Opportunities for Harrow Health, and S A P
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harrow and SAP is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Harrow Health, 11875 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 Harrow Health, 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 Harrow Health, 11875 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 Harrow Health, i.e., Harrow Health, and S A P go up and down completely randomly.
Pair Corralation between Harrow Health, and S A P
Assuming the 90 days horizon Harrow Health, is expected to generate 1.16 times less return on investment than S A P. But when comparing it to its historical volatility, Harrow Health, 11875 is 1.49 times less risky than S A P. It trades about 0.31 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 24,790 in SAP SE ADR on October 21, 2024 and sell it today you would earn a total of 1,493 from holding SAP SE ADR or generate 6.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harrow Health, 11875 vs. SAP SE ADR
Performance |
| Timeline |
| Harrow Health, 11875 |
| SAP SE ADR |
Harrow Health, and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harrow Health, and S A P
The main advantage of trading using opposite Harrow Health, and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harrow Health, 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.| Harrow Health, vs. Harrow Health 8625 | Harrow Health, vs. Babcock Wilcox Enterprises, | Harrow Health, vs. Runway Growth Finance | Harrow Health, vs. MSCI ACWI exAUCONSUMER |
| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, | S A P vs. Cadence Design Systems | S A P vs. PTC Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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