Correlation Between S A P and Maptelligent
Can any of the company-specific risk be diversified away by investing in both S A P and Maptelligent 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 Maptelligent 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 Maptelligent, you can compare the effects of market volatilities on S A P and Maptelligent 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 Maptelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Maptelligent.
Diversification Opportunities for S A P and Maptelligent
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAP and Maptelligent is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Maptelligent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maptelligent 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 Maptelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maptelligent has no effect on the direction of S A P i.e., S A P and Maptelligent go up and down completely randomly.
Pair Corralation between S A P and Maptelligent
Considering the 90-day investment horizon SAP SE ADR is expected to generate 0.08 times more return on investment than Maptelligent. However, SAP SE ADR is 12.31 times less risky than Maptelligent. It trades about 0.37 of its potential returns per unit of risk. Maptelligent is currently generating about -0.21 per unit of risk. If you would invest 23,000 in SAP SE ADR on September 14, 2024 and sell it today you would earn a total of 2,363 from holding SAP SE ADR or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SAP SE ADR vs. Maptelligent
Performance |
| Timeline |
| SAP SE ADR |
| Maptelligent |
S A P and Maptelligent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Maptelligent
The main advantage of trading using opposite S A P and Maptelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Maptelligent 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 Maptelligent will offset losses from the drop in Maptelligent's long position.| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, Common | S A P vs. Cadence Design Systems | S A P vs. PTC Inc |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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