Correlation Between S A P and Webstar Technology

Can any of the company-specific risk be diversified away by investing in both S A P and Webstar Technology 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 Webstar Technology 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 Webstar Technology Group, you can compare the effects of market volatilities on S A P and Webstar Technology 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 Webstar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Webstar Technology.

Diversification Opportunities for S A P and Webstar Technology

0.49

Correlation Coefficient

S A P  Webstar Technology

Very weak diversification

The 3 months correlation between SAP and Webstar is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE ADR and Webstar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webstar Technology 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 Webstar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webstar Technology has no effect on the direction of S A P i.e., S A P and Webstar Technology go up and down completely randomly.

Pair Corralation between S A P and Webstar Technology

Considering the 90-day investment horizon SAP SE ADR is expected to under-perform the Webstar Technology. But the stock apears to be less risky and, when comparing its historical volatility, SAP SE ADR is 1.06 times less risky than Webstar Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Webstar Technology Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.60  in Webstar Technology Group on May 3, 2025 and sell it today you would earn a total of  0.40  from holding Webstar Technology Group or generate 11.11% return on investment over 90 days.

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

SAP SE ADR  vs.  Webstar Technology Group

SAP SE ADR

Risk-Adjusted Performance

Very Weak

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.

Webstar Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Webstar Technology Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Webstar Technology may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with S A P and Webstar Technology

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

The idea behind SAP SE ADR and Webstar Technology Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.