Correlation Between S A P and Quantgate Systems
Can any of the company-specific risk be diversified away by investing in both S A P and Quantgate Systems 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 Quantgate Systems 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 Quantgate Systems, you can compare the effects of market volatilities on S A P and Quantgate Systems 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 Quantgate Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Quantgate Systems.
Diversification Opportunities for S A P and Quantgate Systems
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAP and Quantgate is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Quantgate Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantgate Systems 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 Quantgate Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantgate Systems has no effect on the direction of S A P i.e., S A P and Quantgate Systems go up and down completely randomly.
Pair Corralation between S A P and Quantgate Systems
Considering the 90-day investment horizon S A P is expected to generate 14.22 times less return on investment than Quantgate Systems. But when comparing it to its historical volatility, SAP SE ADR is 13.57 times less risky than Quantgate Systems. It trades about 0.23 of its potential returns per unit of risk. Quantgate Systems is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1.08 in Quantgate Systems on September 12, 2024 and sell it today you would earn a total of 0.90 from holding Quantgate Systems or generate 83.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAP SE ADR vs. Quantgate Systems
Performance |
| Timeline |
| SAP SE ADR |
| Quantgate Systems |
S A P and Quantgate Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Quantgate Systems
The main advantage of trading using opposite S A P and Quantgate Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Quantgate Systems 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 Quantgate Systems will offset losses from the drop in Quantgate Systems' 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 |
| Quantgate Systems vs. Ackroo Inc | Quantgate Systems vs. CurrentC Power | Quantgate Systems vs. Agent Information Software | Quantgate Systems vs. IGEN Networks Corp |
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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