This module allows you to analyze existing cross correlation between Expedia and SAP SE. You can compare the effects of market volatilities on Expedia 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 Expedia with a short position of S A P. See also your portfolio center. Please also check ongoing floating volatility patterns of Expedia and S A P.
Given the investment horizon of 30 days, Expedia is expected to generate 1.45 times more return on investment than S A P. However, Expedia is 1.45 times more volatile than SAP SE. It trades about 0.06 of its potential returns per unit of risk. SAP SE is currently generating about 0.07 per unit of risk. If you would invest 10,638 in Expedia on March 25, 2018 and sell it today you would earn a total of 427.00 from holding Expedia or generate 4.01% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Expedia Inc and SAP SE in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and Expedia 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 Expedia 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 has no effect on the direction of Expedia i.e. Expedia and S A P go up and down completely randomly.
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