Correlation Between PTC and S A P
Can any of the company-specific risk be diversified away by investing in both PTC 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 PTC 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 PTC Inc and SAP SE ADR, you can compare the effects of market volatilities on PTC 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 PTC with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTC and S A P.
Diversification Opportunities for PTC and S A P
Very poor diversification
The 3 months correlation between PTC and SAP is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PTC Inc 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 PTC 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 PTC Inc 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 PTC i.e., PTC and S A P go up and down completely randomly.
Pair Corralation between PTC and S A P
Considering the 90-day investment horizon PTC Inc is expected to generate 1.16 times more return on investment than S A P. However, PTC is 1.16 times more volatile than SAP SE ADR. It trades about 0.14 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.03 per unit of risk. If you would invest 18,359 in PTC Inc on August 24, 2024 and sell it today you would earn a total of 916.00 from holding PTC Inc or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
PTC Inc vs. SAP SE ADR
Performance |
| Timeline |
| PTC Inc |
| SAP SE ADR |
PTC and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTC and S A P
The main advantage of trading using opposite PTC and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTC 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.| PTC vs. SAP SE ADR | PTC vs. Tyler Technologies | PTC vs. Roper Technologies, Common | PTC vs. Cadence Design Systems |
| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, Common | 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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