Correlation Between ASGN and Capgemini
Can any of the company-specific risk be diversified away by investing in both ASGN 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 ASGN and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASGN Inc and Capgemini SE ADR, you can compare the effects of market volatilities on ASGN 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 ASGN with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASGN and Capgemini.
Diversification Opportunities for ASGN and Capgemini
Very weak diversification
The 3 months correlation between ASGN and Capgemini is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ASGN Inc 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 ASGN 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 ASGN Inc 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 ASGN i.e., ASGN and Capgemini go up and down completely randomly.
Pair Corralation between ASGN and Capgemini
Given the investment horizon of 90 days ASGN is expected to generate 2.7 times less return on investment than Capgemini. In addition to that, ASGN is 1.16 times more volatile than Capgemini SE ADR. It trades about 0.11 of its total potential returns per unit of risk. Capgemini SE ADR is currently generating about 0.36 per unit of volatility. If you would invest 3,307 in Capgemini SE ADR on November 5, 2024 and sell it today you would earn a total of 334.00 from holding Capgemini SE ADR or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASGN Inc vs. Capgemini SE ADR
Performance |
| Timeline |
| ASGN Inc |
| Capgemini SE ADR |
ASGN and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASGN and Capgemini
The main advantage of trading using opposite ASGN and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASGN 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.The idea behind ASGN Inc and Capgemini SE ADR 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.| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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