Correlation Between S A P and Blackbaud
Can any of the company-specific risk be diversified away by investing in both S A P and Blackbaud 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 Blackbaud into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE ADR and Blackbaud, you can compare the effects of market volatilities on S A P and Blackbaud 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 Blackbaud. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Blackbaud.
Diversification Opportunities for S A P and Blackbaud
Excellent diversification
The 3 months correlation between SAP and Blackbaud is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Blackbaud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackbaud 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 ADR are associated (or correlated) with Blackbaud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackbaud has no effect on the direction of S A P i.e., S A P and Blackbaud go up and down completely randomly.
Pair Corralation between S A P and Blackbaud
Considering the 90-day investment horizon SAP SE ADR is expected to generate 1.6 times more return on investment than Blackbaud. However, S A P is 1.6 times more volatile than Blackbaud. It trades about 0.31 of its potential returns per unit of risk. Blackbaud is currently generating about 0.21 per unit of risk. If you would invest 24,886 in SAP SE ADR on October 23, 2024 and sell it today you would earn a total of 2,043 from holding SAP SE ADR or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
SAP SE ADR vs. Blackbaud
Performance |
| Timeline |
| SAP SE ADR |
| Blackbaud |
S A P and Blackbaud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Blackbaud
The main advantage of trading using opposite S A P and Blackbaud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Blackbaud 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 Blackbaud will offset losses from the drop in Blackbaud's long position.| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, | S A P vs. Cadence Design Systems | S A P vs. PTC Inc |
| Blackbaud vs. Progress Software | Blackbaud vs. Enfusion | Blackbaud vs. E2open Parent Holdings | Blackbaud vs. Aspen Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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