Correlation Between Capgemini and Thales SA
Can any of the company-specific risk be diversified away by investing in both Capgemini and Thales 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 Thales 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 Thales SA, you can compare the effects of market volatilities on Capgemini and Thales 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 Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Thales SA.
Diversification Opportunities for Capgemini and Thales SA
Excellent diversification
The 3 months correlation between Capgemini and Thales is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales 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 Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Capgemini i.e., Capgemini and Thales SA go up and down completely randomly.
Pair Corralation between Capgemini and Thales SA
Assuming the 90 days trading horizon Capgemini SE is expected to under-perform the Thales SA. In addition to that, Capgemini is 1.13 times more volatile than Thales SA. It trades about -0.27 of its total potential returns per unit of risk. Thales SA is currently generating about -0.15 per unit of volatility. If you would invest 15,195 in Thales SA on August 27, 2024 and sell it today you would lose (1,010) from holding Thales SA or give up 6.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. Thales SA
Performance |
| Timeline |
| Capgemini SE |
| Thales SA |
Capgemini and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Thales SA
The main advantage of trading using opposite Capgemini and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Thales 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 Thales SA will offset losses from the drop in Thales SA's long position.| Capgemini vs. Neurones | Capgemini vs. Alten SA | Capgemini vs. Manitou BF SA | Capgemini vs. Ossiam Minimum Variance |
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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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