Correlation Between Enter Air and Capgemini
Can any of the company-specific risk be diversified away by investing in both Enter Air and Capgemini 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 Enter Air and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and Capgemini SE, you can compare the effects of market volatilities on Enter Air and Capgemini 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 Enter Air with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and Capgemini.
Diversification Opportunities for Enter Air and Capgemini
Very good diversification
The 3 months correlation between Enter and Capgemini is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Enter Air 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 Enter Air SA are associated (or correlated) with Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of Enter Air i.e., Enter Air and Capgemini go up and down completely randomly.
Pair Corralation between Enter Air and Capgemini
Assuming the 90 days trading horizon Enter Air SA is expected to generate 2.96 times more return on investment than Capgemini. However, Enter Air is 2.96 times more volatile than Capgemini SE. It trades about 0.06 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.1 per unit of risk. If you would invest 868.00 in Enter Air SA on September 3, 2024 and sell it today you would earn a total of 344.00 from holding Enter Air SA or generate 39.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. Capgemini SE
Performance |
| Timeline |
| Enter Air SA |
| Capgemini SE |
Enter Air and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and Capgemini
The main advantage of trading using opposite Enter Air and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| Enter Air vs. Uber Technologies | Enter Air vs. Playtech plc | Enter Air vs. Hyatt Hotels | Enter Air vs. HYATT HOTELS A |
| Capgemini vs. Fair Isaac Corp | Capgemini vs. TITANIUM TRANSPORTGROUP | Capgemini vs. Wizz Air Holdings | Capgemini vs. Liberty Broadband |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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