Correlation Between SSC Technologies and S A P
Can any of the company-specific risk be diversified away by investing in both SSC Technologies and S A P 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 SSC Technologies and S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSC Technologies Holdings and SAP SE ADR, you can compare the effects of market volatilities on SSC Technologies and S A P 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 SSC Technologies with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSC Technologies and S A P.
Diversification Opportunities for SSC Technologies and S A P
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSC and SAP is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies Holdings and SAP SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE ADR and SSC Technologies 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 SSC Technologies Holdings are associated (or correlated) with S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE ADR has no effect on the direction of SSC Technologies i.e., SSC Technologies and S A P go up and down completely randomly.
Pair Corralation between SSC Technologies and S A P
Given the investment horizon of 90 days SSC Technologies Holdings is expected to under-perform the S A P. In addition to that, SSC Technologies is 1.31 times more volatile than SAP SE ADR. It trades about -0.01 of its total potential returns per unit of risk. SAP SE ADR is currently generating about 0.03 per unit of volatility. If you would invest 23,459 in SAP SE ADR on August 24, 2024 and sell it today you would earn a total of 144.00 from holding SAP SE ADR or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSC Technologies Holdings vs. SAP SE ADR
Performance |
| Timeline |
| SSC Technologies Holdings |
| SAP SE ADR |
SSC Technologies and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSC Technologies and S A P
The main advantage of trading using opposite SSC Technologies and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.| SSC Technologies vs. Aspen Technology | SSC Technologies vs. Bentley Systems | SSC Technologies vs. Tyler Technologies | SSC Technologies vs. Blackbaud |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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