Correlation Between S A P and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both S A P and Uber Technologies 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 Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and Uber Technologies, you can compare the effects of market volatilities on S A P and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Uber Technologies.
Diversification Opportunities for S A P and Uber Technologies
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAP and Uber is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of S A P i.e., S A P and Uber Technologies go up and down completely randomly.
Pair Corralation between S A P and Uber Technologies
Assuming the 90 days trading horizon SAP SE is expected to generate 0.37 times more return on investment than Uber Technologies. However, SAP SE is 2.7 times less risky than Uber Technologies. It trades about 0.23 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.22 per unit of risk. If you would invest 22,350 in SAP SE on September 24, 2024 and sell it today you would earn a total of 1,325 from holding SAP SE or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAP SE vs. Uber Technologies
Performance |
| Timeline |
| SAP SE |
| Uber Technologies |
S A P and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Uber Technologies
The main advantage of trading using opposite S A P and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| S A P vs. GAMING FAC SA | S A P vs. MCEWEN MINING INC | S A P vs. SERI INDUSTRIAL EO | S A P vs. Singapore Airlines Limited |
| Uber Technologies vs. BW OFFSHORE LTD | Uber Technologies vs. Jacquet Metal Service | Uber Technologies vs. WT OFFSHORE | Uber Technologies vs. ADRIATIC METALS LS 013355 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |