Correlation Between 00108WAF7 and S A P
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By analyzing existing cross correlation between AEP TEX INC and SAP SE ADR, you can compare the effects of market volatilities on 00108WAF7 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 00108WAF7 with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and S A P.
Diversification Opportunities for 00108WAF7 and S A P
Significant diversification
The 3 months correlation between 00108WAF7 and SAP is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC 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 00108WAF7 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 AEP TEX INC 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 00108WAF7 i.e., 00108WAF7 and S A P go up and down completely randomly.
Pair Corralation between 00108WAF7 and S A P
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 3.52 times more return on investment than S A P. However, 00108WAF7 is 3.52 times more volatile than SAP SE ADR. It trades about 0.12 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.24 per unit of risk. If you would invest 7,244 in AEP TEX INC on October 21, 2024 and sell it today you would earn a total of 424.00 from holding AEP TEX INC or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.42% |
| Values | Daily Returns |
AEP TEX INC vs. SAP SE ADR
Performance |
| Timeline |
| AEP TEX INC |
| SAP SE ADR |
00108WAF7 and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and S A P
The main advantage of trading using opposite 00108WAF7 and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 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.| 00108WAF7 vs. Delta Air Lines | 00108WAF7 vs. Air Lease | 00108WAF7 vs. Regeneron Pharmaceuticals | 00108WAF7 vs. Mesa Air Group |
| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, | S A P vs. Cadence Design Systems | S A P vs. PTC Inc |
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.
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