Correlation Between SAP SE and Thinkific Labs
Can any of the company-specific risk be diversified away by investing in both SAP SE 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 SAP SE 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 and Thinkific Labs, you can compare the effects of market volatilities on SAP SE 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 SAP SE with a short position of Thinkific Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAP SE and Thinkific Labs.
Diversification Opportunities for SAP SE and Thinkific Labs
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAP and Thinkific is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Thinkific Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thinkific Labs 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 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 SAP SE i.e., SAP SE and Thinkific Labs go up and down completely randomly.
Pair Corralation between SAP SE and Thinkific Labs
Assuming the 90 days horizon SAP SE is expected to generate 3.98 times less return on investment than Thinkific Labs. But when comparing it to its historical volatility, SAP SE is 2.98 times less risky than Thinkific Labs. It trades about 0.12 of its potential returns per unit of risk. Thinkific Labs is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Thinkific Labs on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Thinkific Labs or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SAP SE vs. Thinkific Labs
Performance |
| Timeline |
| SAP SE |
| Thinkific Labs |
SAP SE and Thinkific Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAP SE and Thinkific Labs
The main advantage of trading using opposite SAP SE and Thinkific Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE 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.| SAP SE vs. RenoWorks Software | SAP SE vs. 01 Communique Laboratory | SAP SE vs. Temenos Group AG | SAP SE vs. Xero Limited |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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