Correlation Between S A P and Manhattan Associates
Can any of the company-specific risk be diversified away by investing in both S A P and Manhattan Associates 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 Manhattan Associates 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 Manhattan Associates, you can compare the effects of market volatilities on S A P and Manhattan Associates 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 Manhattan Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Manhattan Associates.
Diversification Opportunities for S A P and Manhattan Associates
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAP and Manhattan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates 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 Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of S A P i.e., S A P and Manhattan Associates go up and down completely randomly.
Pair Corralation between S A P and Manhattan Associates
Considering the 90-day investment horizon SAP SE ADR is expected to generate 0.8 times more return on investment than Manhattan Associates. However, SAP SE ADR is 1.25 times less risky than Manhattan Associates. It trades about 0.03 of its potential returns per unit of risk. Manhattan Associates is currently generating about 0.01 per unit of risk. If you would invest 23,459 in SAP SE ADR on August 24, 2024 and sell it today you would earn a total of 144.00 from holding SAP SE ADR or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAP SE ADR vs. Manhattan Associates
Performance |
| Timeline |
| SAP SE ADR |
| Manhattan Associates |
S A P and Manhattan Associates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Manhattan Associates
The main advantage of trading using opposite S A P and Manhattan Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Manhattan Associates 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 Manhattan Associates will offset losses from the drop in Manhattan Associates' long position.The idea behind SAP SE ADR and Manhattan Associates pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Manhattan Associates vs. Alkami Technology | Manhattan Associates vs. Envestnet | Manhattan Associates vs. Paycor HCM | Manhattan Associates vs. Procore Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |