Correlation Between Workiva and S A P
Can any of the company-specific risk be diversified away by investing in both Workiva 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 Workiva 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 Workiva and SAP SE ADR, you can compare the effects of market volatilities on Workiva 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 Workiva with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and S A P.
Diversification Opportunities for Workiva and S A P
Pay attention - limited upside
The 3 months correlation between Workiva and SAP is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Workiva 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 Workiva 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 Workiva 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 Workiva i.e., Workiva and S A P go up and down completely randomly.
Pair Corralation between Workiva and S A P
Allowing for the 90-day total investment horizon Workiva is expected to under-perform the S A P. In addition to that, Workiva is 1.53 times more volatile than SAP SE ADR. It trades about -0.02 of its total potential returns per unit of risk. SAP SE ADR is currently generating about 0.15 per unit of volatility. If you would invest 13,455 in SAP SE ADR on December 29, 2023 and sell it today you would earn a total of 6,254 from holding SAP SE ADR or generate 46.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Workiva vs. SAP SE ADR
Performance |
Timeline |
Workiva |
SAP SE ADR |
Workiva and S A P Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Workiva and S A P
The main advantage of trading using opposite Workiva and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva 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.Workiva vs. Kingsoft Cloud HoldingsLtd | Workiva vs. C3 Ai Inc | Workiva vs. Eventbrite Class A | Workiva vs. Daily Journal Corp |
S A P vs. Kingsoft Cloud HoldingsLtd | S A P vs. C3 Ai Inc | S A P vs. Eventbrite Class A | S A P vs. Daily Journal Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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