Correlation Between SAP SE and Electro Sensors

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SAP SE and Electro Sensors 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 Electro Sensors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAP SE and Electro Sensors, you can compare the effects of market volatilities on SAP SE and Electro Sensors 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 Electro Sensors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAP SE and Electro Sensors.

Diversification Opportunities for SAP SE and Electro Sensors

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between SAP and Electro is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Electro Sensors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Sensors 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 Electro Sensors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Sensors has no effect on the direction of SAP SE i.e., SAP SE and Electro Sensors go up and down completely randomly.

Pair Corralation between SAP SE and Electro Sensors

Assuming the 90 days horizon SAP SE is expected to under-perform the Electro Sensors. But the pink sheet apears to be less risky and, when comparing its historical volatility, SAP SE is 3.0 times less risky than Electro Sensors. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Electro Sensors is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  415.00  in Electro Sensors on May 5, 2025 and sell it today you would earn a total of  5.00  from holding Electro Sensors or generate 1.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SAP SE  vs.  Electro Sensors

 Performance 
       Timeline  
SAP SE 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days SAP SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SAP SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Electro Sensors 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Electro Sensors are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Electro Sensors may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SAP SE and Electro Sensors Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SAP SE and Electro Sensors

The main advantage of trading using opposite SAP SE and Electro Sensors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE position performs unexpectedly, Electro Sensors 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 Electro Sensors will offset losses from the drop in Electro Sensors' long position.
The idea behind SAP SE and Electro Sensors 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing