Correlation Between Nemetschek and S A P

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

Diversification Opportunities for Nemetschek and S A P

-0.12

Correlation Coefficient

Nemetschek  S A P

Good diversification

The 3 months correlation between Nemetschek and SAP is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nemetschek AG ON and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and Nemetschek 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 Nemetschek AG ON 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 has no effect on the direction of Nemetschek i.e., Nemetschek and S A P go up and down completely randomly.

Pair Corralation between Nemetschek and S A P

Assuming the 90 days trading horizon Nemetschek AG ON is expected to generate 1.12 times more return on investment than S A P. However, Nemetschek is 1.12 times more volatile than SAP SE. It trades about 0.08 of its potential returns per unit of risk. SAP SE is currently generating about -0.09 per unit of risk. If you would invest  12,194  in Nemetschek AG ON on May 5, 2025 and sell it today you would earn a total of  826.00  from holding Nemetschek AG ON or generate 6.77% return on investment over 90 days.

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

Nemetschek AG ON  vs.  SAP SE

Nemetschek AG ON

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nemetschek AG ON are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Nemetschek may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SAP SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAP SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nemetschek and S A P

The main advantage of trading using opposite Nemetschek and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nemetschek 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 Nemetschek AG ON and SAP SE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.