Correlation Between S A P and Spectral Med
Can any of the company-specific risk be diversified away by investing in both S A P and Spectral Med 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 Spectral Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saputo Inc and Spectral Med, you can compare the effects of market volatilities on S A P and Spectral Med 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 Spectral Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of S A P and Spectral Med.
Diversification Opportunities for S A P and Spectral Med
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SAP and Spectral is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Saputo Inc and Spectral Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral Med 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 Saputo Inc are associated (or correlated) with Spectral Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral Med has no effect on the direction of S A P i.e., S A P and Spectral Med go up and down completely randomly.
Pair Corralation between S A P and Spectral Med
Assuming the 90 days trading horizon Saputo Inc is expected to generate 0.41 times more return on investment than Spectral Med. However, Saputo Inc is 2.47 times less risky than Spectral Med. It trades about 0.27 of its potential returns per unit of risk. Spectral Med is currently generating about -0.08 per unit of risk. If you would invest 3,359 in Saputo Inc on September 28, 2025 and sell it today you would earn a total of 724.00 from holding Saputo Inc or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saputo Inc vs. Spectral Med
Performance |
| Timeline |
| Saputo Inc |
| Spectral Med |
S A P and Spectral Med Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S A P and Spectral Med
The main advantage of trading using opposite S A P and Spectral Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S A P position performs unexpectedly, Spectral Med 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 Spectral Med will offset losses from the drop in Spectral Med's long position.| S A P vs. Molson Coors Canada | S A P vs. George Weston Limited | S A P vs. Empire Company Limited | S A P vs. Loblaw Companies Limited |
| Spectral Med vs. High Tide | Spectral Med vs. Cipher Pharmaceuticals | Spectral Med vs. Aurora Cannabis | Spectral Med vs. Fennec Pharmaceuticals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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