Correlation Between SAP SE and Hestia Insight
Can any of the company-specific risk be diversified away by investing in both SAP SE and Hestia Insight 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 SAP SE and Hestia Insight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and Hestia Insight, you can compare the effects of market volatilities on SAP SE and Hestia Insight 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 SAP SE with a short position of Hestia Insight. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAP SE and Hestia Insight.
Diversification Opportunities for SAP SE and Hestia Insight
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAP and Hestia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Hestia Insight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hestia Insight and SAP SE 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 Hestia Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hestia Insight has no effect on the direction of SAP SE i.e., SAP SE and Hestia Insight go up and down completely randomly.
Pair Corralation between SAP SE and Hestia Insight
Assuming the 90 days horizon SAP SE is expected to under-perform the Hestia Insight. In addition to that, SAP SE is 1.17 times more volatile than Hestia Insight. It trades about -0.03 of its total potential returns per unit of risk. Hestia Insight is currently generating about 0.13 per unit of volatility. If you would invest 16.00 in Hestia Insight on March 7, 2024 and sell it today you would earn a total of 2.00 from holding Hestia Insight or generate 12.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SAP SE vs. Hestia Insight
Performance |
Timeline |
SAP SE |
Hestia Insight |
SAP SE and Hestia Insight Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SAP SE and Hestia Insight
The main advantage of trading using opposite SAP SE and Hestia Insight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE position performs unexpectedly, Hestia Insight 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 Hestia Insight will offset losses from the drop in Hestia Insight's long position.SAP SE vs. NextPlat Corp | SAP SE vs. Waldencast Acquisition Corp | SAP SE vs. CXApp Inc | SAP SE vs. Alkami Technology |
Hestia Insight vs. NextPlat Corp | Hestia Insight vs. Waldencast Acquisition Corp | Hestia Insight vs. CXApp Inc | Hestia Insight vs. Alkami Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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