Correlation Between SAP SE and Baumer SA

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

Diversification Opportunities for SAP SE and Baumer SA

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between SAP and Baumer is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA 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 Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of SAP SE i.e., SAP SE and Baumer SA go up and down completely randomly.

Pair Corralation between SAP SE and Baumer SA

Assuming the 90 days trading horizon SAP SE is expected to generate 7.77 times less return on investment than Baumer SA. But when comparing it to its historical volatility, SAP SE is 1.61 times less risky than Baumer SA. It trades about 0.03 of its potential returns per unit of risk. Baumer SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,300  in Baumer SA on April 25, 2025 and sell it today you would earn a total of  280.00  from holding Baumer SA or generate 21.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SAP SE  vs.  Baumer SA

 Performance 
       Timeline  
SAP SE 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SAP SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Baumer SA 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Baumer SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Baumer SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

SAP SE and Baumer SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SAP SE and Baumer SA

The main advantage of trading using opposite SAP SE and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE position performs unexpectedly, Baumer SA 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 Baumer SA will offset losses from the drop in Baumer SA's long position.
The idea behind SAP SE and Baumer SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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