Correlation Between Appen and Capgemini
Can any of the company-specific risk be diversified away by investing in both Appen 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 Appen and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and Capgemini SE ADR, you can compare the effects of market volatilities on Appen 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 Appen with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and Capgemini.
Diversification Opportunities for Appen and Capgemini
Very good diversification
The 3 months correlation between Appen and Capgemini is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and Capgemini SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE ADR and Appen 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 Appen Limited 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 ADR has no effect on the direction of Appen i.e., Appen and Capgemini go up and down completely randomly.
Pair Corralation between Appen and Capgemini
Assuming the 90 days horizon Appen is expected to generate 1.46 times less return on investment than Capgemini. In addition to that, Appen is 3.2 times more volatile than Capgemini SE ADR. It trades about 0.09 of its total potential returns per unit of risk. Capgemini SE ADR is currently generating about 0.43 per unit of volatility. If you would invest 3,204 in Capgemini SE ADR on November 4, 2024 and sell it today you would earn a total of 437.00 from holding Capgemini SE ADR or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Appen Limited vs. Capgemini SE ADR
Performance |
| Timeline |
| Appen Limited |
| Capgemini SE ADR |
Appen and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and Capgemini
The main advantage of trading using opposite Appen and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen 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.| Appen vs. Appen Limited | Appen vs. Direct Communication Solutions | Appen vs. Capgemini SE ADR | Appen vs. Quisitive Technology Solutions |
| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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