Correlation Between Capgemini and ACTEOS SA
Can any of the company-specific risk be diversified away by investing in both Capgemini and ACTEOS SA 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 ACTEOS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and ACTEOS SA, you can compare the effects of market volatilities on Capgemini and ACTEOS SA 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 ACTEOS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and ACTEOS SA.
Diversification Opportunities for Capgemini and ACTEOS SA
Poor diversification
The 3 months correlation between Capgemini and ACTEOS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and ACTEOS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACTEOS 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 ACTEOS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACTEOS SA has no effect on the direction of Capgemini i.e., Capgemini and ACTEOS SA go up and down completely randomly.
Pair Corralation between Capgemini and ACTEOS SA
Assuming the 90 days trading horizon Capgemini SE is expected to under-perform the ACTEOS SA. But the stock apears to be less risky and, when comparing its historical volatility, Capgemini SE is 1.24 times less risky than ACTEOS SA. The stock trades about -0.29 of its potential returns per unit of risk. The ACTEOS SA is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 132.00 in ACTEOS SA on August 30, 2024 and sell it today you would lose (19.00) from holding ACTEOS SA or give up 14.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. ACTEOS SA
Performance |
| Timeline |
| Capgemini SE |
| ACTEOS SA |
Capgemini and ACTEOS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and ACTEOS SA
The main advantage of trading using opposite Capgemini and ACTEOS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, ACTEOS SA 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 ACTEOS SA will offset losses from the drop in ACTEOS SA's long position.| Capgemini vs. Atos SE | Capgemini vs. Compagnie de Saint Gobain | Capgemini vs. Pernod Ricard SA | Capgemini vs. Bouygues SA |
| ACTEOS SA vs. Thales SA | ACTEOS SA vs. Safran SA | ACTEOS SA vs. Air Liquide SA | ACTEOS SA vs. Capgemini SE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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