Correlation Between SAP SE and KENTIMA HOLDING
Can any of the company-specific risk be diversified away by investing in both SAP SE and KENTIMA HOLDING 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 SAP SE and KENTIMA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and KENTIMA HOLDING AB, you can compare the effects of market volatilities on SAP SE and KENTIMA HOLDING 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 SAP SE with a short position of KENTIMA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAP SE and KENTIMA HOLDING.
Diversification Opportunities for SAP SE and KENTIMA HOLDING
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAP and KENTIMA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and KENTIMA HOLDING AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENTIMA HOLDING AB and SAP SE 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 are associated (or correlated) with KENTIMA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENTIMA HOLDING AB has no effect on the direction of SAP SE i.e., SAP SE and KENTIMA HOLDING go up and down completely randomly.
Pair Corralation between SAP SE and KENTIMA HOLDING
Assuming the 90 days trading horizon SAP SE is expected to generate 2.35 times less return on investment than KENTIMA HOLDING. But when comparing it to its historical volatility, SAP SE is 4.54 times less risky than KENTIMA HOLDING. It trades about 0.12 of its potential returns per unit of risk. KENTIMA HOLDING AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12.00 in KENTIMA HOLDING AB on September 3, 2024 and sell it today you would earn a total of 3.00 from holding KENTIMA HOLDING AB or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAP SE vs. KENTIMA HOLDING AB
Performance |
| Timeline |
| SAP SE |
| KENTIMA HOLDING AB |
SAP SE and KENTIMA HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAP SE and KENTIMA HOLDING
The main advantage of trading using opposite SAP SE and KENTIMA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE position performs unexpectedly, KENTIMA HOLDING 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 KENTIMA HOLDING will offset losses from the drop in KENTIMA HOLDING's long position.| SAP SE vs. FAST RETAIL ADR | SAP SE vs. INSURANCE AUST GRP | SAP SE vs. Direct Line Insurance | SAP SE vs. Retail Estates NV |
| KENTIMA HOLDING vs. ADRIATIC METALS LS 013355 | KENTIMA HOLDING vs. Pembina Pipeline Corp | KENTIMA HOLDING vs. Lion One Metals | KENTIMA HOLDING vs. Sanyo Chemical Industries |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| 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 | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |