Correlation Between FARO Technologies and S A P
Can any of the company-specific risk be diversified away by investing in both FARO Technologies 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 FARO Technologies 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 FARO Technologies and SAP SE ADR, you can compare the effects of market volatilities on FARO Technologies 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 FARO Technologies with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARO Technologies and S A P.
Diversification Opportunities for FARO Technologies and S A P
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FARO and SAP is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding FARO Technologies 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 FARO Technologies 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 FARO Technologies 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 FARO Technologies i.e., FARO Technologies and S A P go up and down completely randomly.
Pair Corralation between FARO Technologies and S A P
If you would invest 27,148 in SAP SE ADR on July 11, 2025 and sell it today you would earn a total of 567.00 from holding SAP SE ADR or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
FARO Technologies vs. SAP SE ADR
Performance |
| Timeline |
| FARO Technologies |
Risk-Adjusted Performance
Mild
Weak | Strong |
| SAP SE ADR |
FARO Technologies and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARO Technologies and S A P
The main advantage of trading using opposite FARO Technologies and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARO Technologies 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.| FARO Technologies vs. Coherent | FARO Technologies vs. ESCO Technologies | FARO Technologies vs. Mesa Laboratories | FARO Technologies vs. Vishay Precision Group |
| S A P vs. Tyler Technologies | S A P vs. Roper Technologies, | S A P vs. Cadence Design Systems | S A P vs. PTC Inc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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