Correlation Between Shopify and SAP SE

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shopify and SAP SE 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 Shopify and SAP SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shopify and SAP SE, you can compare the effects of market volatilities on Shopify and SAP SE 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 Shopify with a short position of SAP SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shopify and SAP SE.

Diversification Opportunities for Shopify and SAP SE

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Shopify and SAP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shopify and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and Shopify 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 Shopify are associated (or correlated) with SAP SE. 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 Shopify i.e., Shopify and SAP SE go up and down completely randomly.

Pair Corralation between Shopify and SAP SE

Given the investment horizon of 90 days Shopify is expected to under-perform the SAP SE. In addition to that, Shopify is 1.79 times more volatile than SAP SE. It trades about -0.01 of its total potential returns per unit of risk. SAP SE is currently generating about 0.19 per unit of volatility. If you would invest  16,294  in SAP SE on December 20, 2023 and sell it today you would earn a total of  2,454  from holding SAP SE or generate 15.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shopify  vs.  SAP SE

 Performance 
       Timeline  
Shopify 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Shopify are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Shopify is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
SAP SE 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, SAP SE reported solid returns over the last few months and may actually be approaching a breakup point.

Shopify and SAP SE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Shopify and SAP SE

The main advantage of trading using opposite Shopify and SAP SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shopify position performs unexpectedly, SAP SE 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 SAP SE will offset losses from the drop in SAP SE's long position.
The idea behind Shopify and SAP SE 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

Other Complementary Tools

Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Global Correlations
Find global opportunities by holding instruments from different markets
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules