Correlation Between S A P and Kuehne +

Can any of the company-specific risk be diversified away by investing in both S A P and Kuehne + 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 S A P and Kuehne + into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAP SE and Kuehne Nagel International, you can compare the effects of market volatilities on S A P and Kuehne + 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 S A P with a short position of Kuehne +. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Kuehne +.

Diversification Opportunities for S A P and Kuehne +

0.19

Correlation Coefficient

S A P  Kuehne +

Average diversification

The 3 months correlation between SAP and Kuehne is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna and S A P 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 Kuehne +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of S A P i.e., S A P and Kuehne + go up and down completely randomly.

Pair Corralation between S A P and Kuehne +

Assuming the 90 days horizon SAP SE is expected to generate 0.76 times more return on investment than Kuehne +. However, SAP SE is 1.31 times less risky than Kuehne +. It trades about 0.06 of its potential returns per unit of risk. Kuehne Nagel International is currently generating about 0.01 per unit of risk. If you would invest  23,620  in SAP SE on December 29, 2024 and sell it today you would earn a total of  1,335  from holding SAP SE or generate 5.65% return on investment over 90 days.

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

SAP SE  vs.  Kuehne Nagel International

SAP SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, S A P may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kuehne Nagel Interna

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kuehne Nagel International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Kuehne + is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with S A P and Kuehne +

The main advantage of trading using opposite S A P and Kuehne + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Kuehne + 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 Kuehne + will offset losses from the drop in Kuehne +'s long position.

The idea behind SAP SE and Kuehne Nagel International 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.