Correlation Between Capgemini and Poujoulat
Can any of the company-specific risk be diversified away by investing in both Capgemini and Poujoulat 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 Capgemini and Poujoulat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and Poujoulat SA, you can compare the effects of market volatilities on Capgemini and Poujoulat 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 Capgemini with a short position of Poujoulat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Poujoulat.
Diversification Opportunities for Capgemini and Poujoulat
Average diversification
The 3 months correlation between Capgemini and Poujoulat is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Poujoulat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poujoulat SA and Capgemini 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 Capgemini SE are associated (or correlated) with Poujoulat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poujoulat SA has no effect on the direction of Capgemini i.e., Capgemini and Poujoulat go up and down completely randomly.
Pair Corralation between Capgemini and Poujoulat
Assuming the 90 days trading horizon Capgemini SE is expected to generate 0.72 times more return on investment than Poujoulat. However, Capgemini SE is 1.39 times less risky than Poujoulat. It trades about 0.38 of its potential returns per unit of risk. Poujoulat SA is currently generating about -0.04 per unit of risk. If you would invest 15,665 in Capgemini SE on November 3, 2024 and sell it today you would earn a total of 1,930 from holding Capgemini SE or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. Poujoulat SA
Performance |
| Timeline |
| Capgemini SE |
| Poujoulat SA |
Capgemini and Poujoulat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Poujoulat
The main advantage of trading using opposite Capgemini and Poujoulat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Poujoulat 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 Poujoulat will offset losses from the drop in Poujoulat's long position.| Capgemini vs. Atos SE | Capgemini vs. Compagnie de Saint Gobain | Capgemini vs. Pernod Ricard SA | Capgemini vs. Bouygues SA |
| Poujoulat vs. Moulinvest | Poujoulat vs. SA Catana Group | Poujoulat vs. Piscines Desjoyaux SA | Poujoulat vs. Thermador Groupe SA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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