Correlation Between METTLER TOLEDO and S A P
Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO 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 METTLER TOLEDO 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 METTLER TOLEDO INTL and SAP SE, you can compare the effects of market volatilities on METTLER TOLEDO 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 METTLER TOLEDO with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and S A P.
Diversification Opportunities for METTLER TOLEDO and S A P
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between METTLER and SAP is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and METTLER TOLEDO 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 METTLER TOLEDO INTL 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 METTLER TOLEDO i.e., METTLER TOLEDO and S A P go up and down completely randomly.
Pair Corralation between METTLER TOLEDO and S A P
Assuming the 90 days trading horizon METTLER TOLEDO is expected to generate 4.2 times less return on investment than S A P. In addition to that, METTLER TOLEDO is 1.43 times more volatile than SAP SE. It trades about 0.02 of its total potential returns per unit of risk. SAP SE is currently generating about 0.12 per unit of volatility. If you would invest 16,019 in SAP SE on August 29, 2024 and sell it today you would earn a total of 6,386 from holding SAP SE or generate 39.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METTLER TOLEDO INTL vs. SAP SE
Performance |
| Timeline |
| METTLER TOLEDO INTL |
| SAP SE |
METTLER TOLEDO and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METTLER TOLEDO and S A P
The main advantage of trading using opposite METTLER TOLEDO and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO 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.| METTLER TOLEDO vs. AUTO TRADER ADR | METTLER TOLEDO vs. Vastned Retail NV | METTLER TOLEDO vs. TAL Education Group | METTLER TOLEDO vs. DEVRY EDUCATION GRP |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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