Correlation Between Kingsoft Cloud and S A P

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

Diversification Opportunities for Kingsoft Cloud and S A P

-0.53

Correlation Coefficient

Kingsoft Cloud  S A P

Excellent diversification

The 3 months correlation between Kingsoft and SAP is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kingsoft Cloud Holdings 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 Kingsoft Cloud 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 Kingsoft Cloud Holdings 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 Kingsoft Cloud i.e., Kingsoft Cloud and S A P go up and down completely randomly.

Pair Corralation between Kingsoft Cloud and S A P

Allowing for the 90-day total investment horizon Kingsoft Cloud Holdings is expected to under-perform the S A P. In addition to that, Kingsoft Cloud is 3.0 times more volatile than SAP SE ADR. It trades about -0.06 of its total potential returns per unit of risk. SAP SE ADR is currently generating about -0.03 per unit of volatility. If you would invest  28,803  in SAP SE ADR on July 25, 2025 and sell it today you would lose (950.00) from holding SAP SE ADR or give up 3.3% of portfolio value over 90 days.

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

Kingsoft Cloud Holdings  vs.  SAP SE ADR

Kingsoft Cloud Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Kingsoft Cloud Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SAP SE ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days SAP SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, S A P is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kingsoft Cloud and S A P

The main advantage of trading using opposite Kingsoft Cloud and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsoft Cloud 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 Kingsoft Cloud Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.