Correlation Between S A P and Fandom Sports

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

By analyzing existing cross correlation between SAP SE ADR and Fandom Sports Media, you can compare the effects of market volatilities on S A P and Fandom Sports 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 Fandom Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Fandom Sports.

Diversification Opportunities for S A P and Fandom Sports

0.63

Correlation Coefficient

S A P  Fandom Sports

Poor diversification

The 3 months correlation between SAP and Fandom is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Fandom Sports Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fandom Sports Media 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 ADR are associated (or correlated) with Fandom Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fandom Sports Media has no effect on the direction of S A P i.e., S A P and Fandom Sports go up and down completely randomly.

Pair Corralation between S A P and Fandom Sports

Considering the 90-day investment horizon SAP SE ADR is expected to generate 0.21 times more return on investment than Fandom Sports. However, SAP SE ADR is 4.81 times less risky than Fandom Sports. It trades about -0.14 of its potential returns per unit of risk. Fandom Sports Media is currently generating about -0.17 per unit of risk. If you would invest  27,511  in SAP SE ADR on August 27, 2025 and sell it today you would lose (3,682) from holding SAP SE ADR or give up 13.38% of portfolio value over 90 days.

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

SAP SE ADR  vs.  Fandom Sports Media

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 conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Fandom Sports Media

Risk-Adjusted Performance

Weakest

Over the last 90 days Fandom Sports Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with S A P and Fandom Sports

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

The idea behind SAP SE ADR and Fandom Sports Media 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.