Correlation Between Roper Technologies, and S A P

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

Diversification Opportunities for Roper Technologies, and S A P

0.68

Correlation Coefficient

Roper Technologies,  S A P

Poor diversification

The 3 months correlation between Roper and SAP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, 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 Roper Technologies, 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 Roper Technologies, 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 Roper Technologies, i.e., Roper Technologies, and S A P go up and down completely randomly.

Pair Corralation between Roper Technologies, and S A P

Considering the 90-day investment horizon Roper Technologies, is expected to generate 1.22 times more return on investment than S A P. However, Roper Technologies, is 1.22 times more volatile than SAP SE ADR. It trades about 0.26 of its potential returns per unit of risk. SAP SE ADR is currently generating about 0.14 per unit of risk. If you would invest  54,133  in Roper Technologies, on November 28, 2024 and sell it today you would earn a total of  4,601  from holding Roper Technologies, or generate 8.5% return on investment over 90 days.

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

Roper Technologies,  vs.  SAP SE ADR

Roper Technologies,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Roper Technologies, 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE ADR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, S A P reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roper Technologies, and S A P

The main advantage of trading using opposite Roper Technologies, and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roper Technologies, 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 Roper Technologies, 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.