Correlation Between Q2M Managementberatu and S A P
Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu 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 Q2M Managementberatung AG and SAP SE, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and S A P.
Diversification Opportunities for Q2M Managementberatu and S A P
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Q2M and SAP is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and S A P go up and down completely randomly.
Pair Corralation between Q2M Managementberatu and S A P
Assuming the 90 days trading horizon Q2M Managementberatu is expected to generate 93.61 times less return on investment than S A P. But when comparing it to its historical volatility, Q2M Managementberatung AG is 2.36 times less risky than S A P. It trades about 0.0 of its potential returns per unit of risk. SAP SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,085 in SAP SE on August 31, 2024 and sell it today you would earn a total of 10,025 from holding SAP SE or generate 82.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Q2M Managementberatung AG vs. SAP SE
Performance |
| Timeline |
| Q2M Managementberatung |
| SAP SE |
Q2M Managementberatu and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Q2M Managementberatu and S A P
The main advantage of trading using opposite Q2M Managementberatu and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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.| Q2M Managementberatu vs. Media and Games | Q2M Managementberatu vs. TSOGO SUN GAMING | Q2M Managementberatu vs. PENN NATL GAMING | Q2M Managementberatu vs. Scientific Games |
| S A P vs. SIVERS SEMICONDUCTORS AB | S A P vs. Darden Restaurants | S A P vs. Reliance Steel Aluminum | S A P vs. Q2M Managementberatung AG |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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