Correlation Between PROSIEBENSAT1 MEDIADR4/ and SAP SE
Can any of the company-specific risk be diversified away by investing in both PROSIEBENSAT1 MEDIADR4/ and SAP SE 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 PROSIEBENSAT1 MEDIADR4/ and SAP SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROSIEBENSAT1 MEDIADR4 and SAP SE, you can compare the effects of market volatilities on PROSIEBENSAT1 MEDIADR4/ and SAP SE 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 PROSIEBENSAT1 MEDIADR4/ with a short position of SAP SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROSIEBENSAT1 MEDIADR4/ and SAP SE.
Diversification Opportunities for PROSIEBENSAT1 MEDIADR4/ and SAP SE
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PROSIEBENSAT1 and SAP is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PROSIEBENSAT1 MEDIADR4 and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4 are associated (or correlated) with SAP SE. 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 PROSIEBENSAT1 MEDIADR4/ i.e., PROSIEBENSAT1 MEDIADR4/ and SAP SE go up and down completely randomly.
Pair Corralation between PROSIEBENSAT1 MEDIADR4/ and SAP SE
Assuming the 90 days trading horizon PROSIEBENSAT1 MEDIADR4/ is expected to generate 4.35 times less return on investment than SAP SE. In addition to that, PROSIEBENSAT1 MEDIADR4/ is 1.9 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 0.14 per unit of volatility. If you would invest 14,104 in SAP SE on November 9, 2024 and sell it today you would earn a total of 12,696 from holding SAP SE or generate 90.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROSIEBENSAT1 MEDIADR4 vs. SAP SE
Performance |
| Timeline |
| PROSIEBENSAT1 MEDIADR4/ |
| SAP SE |
PROSIEBENSAT1 MEDIADR4/ and SAP SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROSIEBENSAT1 MEDIADR4/ and SAP SE
The main advantage of trading using opposite PROSIEBENSAT1 MEDIADR4/ and SAP SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROSIEBENSAT1 MEDIADR4/ position performs unexpectedly, SAP SE 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 SAP SE will offset losses from the drop in SAP SE's long position.| PROSIEBENSAT1 MEDIADR4/ vs. Kaufman Broad SA | PROSIEBENSAT1 MEDIADR4/ vs. EITZEN CHEMICALS | PROSIEBENSAT1 MEDIADR4/ vs. GRUPO CARSO A1 | PROSIEBENSAT1 MEDIADR4/ vs. AIR PRODCHEMICALS |
| SAP SE vs. Laureate Education | SAP SE vs. DEVRY EDUCATION GRP | SAP SE vs. CHINA EDUCATION GROUP | SAP SE vs. Adtalem Global Education |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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