Correlation Between Stamps and S A P

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Can any of the company-specific risk be diversified away by investing in both Stamps 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 Stamps 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 Stamps Inc and SAP SE ADR, you can compare the effects of market volatilities on Stamps 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 Stamps with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stamps and S A P.

Diversification Opportunities for Stamps and S A P

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Stamps and SAP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stamps 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 Stamps 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 Stamps 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 Stamps i.e., Stamps and S A P go up and down completely randomly.

Pair Corralation between Stamps and S A P

If you would invest  10,278  in SAP SE ADR on December 30, 2023 and sell it today you would earn a total of  9,225  from holding SAP SE ADR or generate 89.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Stamps Inc  vs.  SAP SE ADR

 Performance 
       Timeline  
Stamps Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Stamps Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Stamps is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
SAP SE ADR 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE ADR are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, S A P reported solid returns over the last few months and may actually be approaching a breakup point.

Stamps and S A P Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stamps and S A P

The main advantage of trading using opposite Stamps and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stamps 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.
The idea behind Stamps Inc and SAP SE ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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