Correlation Between Ehave and S A P

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

Diversification Opportunities for Ehave and S A P

0.36

Correlation Coefficient

Ehave  S A P

Weak diversification

The 3 months correlation between Ehave and SAP is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ehave 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 Ehave 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 Ehave 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 Ehave i.e., Ehave and S A P go up and down completely randomly.

Pair Corralation between Ehave and S A P

Assuming the 90 days horizon Ehave Inc is expected to generate 51.62 times more return on investment than S A P. However, Ehave is 51.62 times more volatile than SAP SE ADR. It trades about 0.13 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.11 per unit of risk. If you would invest  0.10  in Ehave Inc on December 26, 2024 and sell it today you would earn a total of  0.10  from holding Ehave Inc or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ehave Inc  vs.  SAP SE ADR

Ehave Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ehave Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Ehave reported solid returns over the last few months and may actually be approaching a breakup point.

SAP SE ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, S A P may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ehave and S A P

The main advantage of trading using opposite Ehave and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehave 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 Ehave 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.