Correlation Between S A P and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both S A P and LOANDEPOT INC 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 S A P and LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and LOANDEPOT INC A, you can compare the effects of market volatilities on S A P and LOANDEPOT INC 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 S A P with a short position of LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and LOANDEPOT INC.
Diversification Opportunities for S A P and LOANDEPOT INC
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAP and LOANDEPOT is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A and S A P 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 SAP SE are associated (or correlated) with LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of S A P i.e., S A P and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between S A P and LOANDEPOT INC
Assuming the 90 days trading horizon SAP SE is expected to generate 0.26 times more return on investment than LOANDEPOT INC. However, SAP SE is 3.91 times less risky than LOANDEPOT INC. It trades about 0.53 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.1 per unit of risk. If you would invest 23,925 in SAP SE on November 7, 2024 and sell it today you would earn a total of 3,155 from holding SAP SE or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
SAP SE vs. LOANDEPOT INC A
Performance |
| Timeline |
| SAP SE |
| LOANDEPOT INC A |
S A P and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and LOANDEPOT INC
The main advantage of trading using opposite S A P and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| S A P vs. Beta Systems Software | S A P vs. IDP EDUCATION LTD | S A P vs. CHINA EDUCATION GROUP | S A P vs. Grand Canyon Education |
| LOANDEPOT INC vs. MARKET VECTR RETAIL | LOANDEPOT INC vs. MAVEN WIRELESS SWEDEN | LOANDEPOT INC vs. Mobilezone Holding AG | LOANDEPOT INC vs. Highlight Communications 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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