Correlation Between S A P and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both S A P and WisdomTree Emerging 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 WisdomTree Emerging 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 WisdomTree Emerging Markets, you can compare the effects of market volatilities on S A P and WisdomTree Emerging 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 WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and WisdomTree Emerging.
Diversification Opportunities for S A P and WisdomTree Emerging
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAP and WisdomTree is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of S A P i.e., S A P and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between S A P and WisdomTree Emerging
Considering the 90-day investment horizon SAP SE ADR is expected to under-perform the WisdomTree Emerging. But the stock apears to be less risky and, when comparing its historical volatility, SAP SE ADR is 3.45 times less risky than WisdomTree Emerging. The stock trades about -0.19 of its potential returns per unit of risk. The WisdomTree Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,308 in WisdomTree Emerging Markets on October 26, 2025 and sell it today you would earn a total of 68.00 from holding WisdomTree Emerging Markets or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.72% |
| Values | Daily Returns |
SAP SE ADR vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| SAP SE ADR |
| WisdomTree Emerging |
S A P and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and WisdomTree Emerging
The main advantage of trading using opposite S A P and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging'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 |
| WisdomTree Emerging vs. WisdomTree Battery Solutions | WisdomTree Emerging vs. WisdomTree Quality Dividend | WisdomTree Emerging vs. WisdomTree Cybersecurity UCITS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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