This module allows you to analyze existing cross correlation between SAP SE and VMware Inc. You can compare the effects of market volatilities on S A P and VMware 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 S A P with a short position of VMware. See also your portfolio center
. Please also check ongoing floating volatility patterns of S A P
SAP SE vs VMware Inc.
Considering 30-days investment horizon, SAP SE is expected to generate 0.66 times more return on investment than VMware. However, SAP SE is 1.5 times less risky than VMware. It trades about 0.06 of its potential returns per unit of risk. VMware Inc is currently generating about -0.2 per unit of risk. If you would invest 10,630 in SAP SE on May 26, 2017 and sell it today you would earn a total of 118.00 from holding SAP SE or generate 1.11% return on investment over 30 days.
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Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and VMware Inc. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on VMware Inc and S A P 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 VMware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VMware Inc has no effect on the direction of S A P i.e. S A P and VMware go up and down completely randomly.
Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 4 (%) of all global equities and portfolios over the last 30 days.
Over the last 30 days VMware Inc has generated negative risk-adjusted returns adding no value to investors with long positions.