Correlation Between Alten SA and Capgemini
Can any of the company-specific risk be diversified away by investing in both Alten SA 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 Alten SA and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alten SA and Capgemini SE, you can compare the effects of market volatilities on Alten SA 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 Alten SA with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alten SA and Capgemini.
Diversification Opportunities for Alten SA and Capgemini
Almost no diversification
The 3 months correlation between Alten and Capgemini is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Alten SA 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 Alten 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 Alten SA i.e., Alten SA and Capgemini go up and down completely randomly.
Pair Corralation between Alten SA and Capgemini
Assuming the 90 days trading horizon Alten SA is expected to generate 0.75 times more return on investment than Capgemini. However, Alten SA is 1.34 times less risky than Capgemini. It trades about -0.05 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.29 per unit of risk. If you would invest 8,135 in Alten SA on August 28, 2024 and sell it today you would lose (155.00) from holding Alten SA or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alten SA vs. Capgemini SE
Performance |
| Timeline |
| Alten SA |
| Capgemini SE |
Alten SA and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alten SA and Capgemini
The main advantage of trading using opposite Alten SA and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alten SA 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.| Alten SA vs. Neurones | Alten SA vs. Manitou BF SA | Alten SA vs. Ossiam Minimum Variance | Alten SA vs. Granite 3x LVMH |
| Capgemini vs. Neurones | Capgemini vs. Alten SA | Capgemini vs. Manitou BF SA | Capgemini vs. Ossiam Minimum Variance |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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