Correlation Between S A P and Thinkific Labs
Can any of the company-specific risk be diversified away by investing in both S A P and Thinkific Labs 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 Thinkific Labs 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 Thinkific Labs, you can compare the effects of market volatilities on S A P and Thinkific Labs 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 Thinkific Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Thinkific Labs.
Diversification Opportunities for S A P and Thinkific Labs
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAP and Thinkific is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Thinkific Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkific Labs 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 Thinkific Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thinkific Labs has no effect on the direction of S A P i.e., S A P and Thinkific Labs go up and down completely randomly.
Pair Corralation between S A P and Thinkific Labs
Considering the 90-day investment horizon SAP SE ADR is expected to generate 0.5 times more return on investment than Thinkific Labs. However, SAP SE ADR is 1.99 times less risky than Thinkific Labs. It trades about 0.13 of its potential returns per unit of risk. Thinkific Labs is currently generating about -0.02 per unit of risk. If you would invest 18,424 in SAP SE ADR on September 1, 2024 and sell it today you would earn a total of 5,336 from holding SAP SE ADR or generate 28.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
SAP SE ADR vs. Thinkific Labs
Performance |
| Timeline |
| SAP SE ADR |
| Thinkific Labs |
S A P and Thinkific Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Thinkific Labs
The main advantage of trading using opposite S A P and Thinkific Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Thinkific Labs 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 Thinkific Labs will offset losses from the drop in Thinkific Labs' 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 |
| Thinkific Labs vs. Waldencast Acquisition Corp | Thinkific Labs vs. Alkami Technology | Thinkific Labs vs. ADEIA P | Thinkific Labs vs. Paycor HCM |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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