Correlation Between Capgemini and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both Capgemini and Nokia Oyj 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 Nokia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and Nokia Oyj, you can compare the effects of market volatilities on Capgemini and Nokia Oyj 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 Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Nokia Oyj.
Diversification Opportunities for Capgemini and Nokia Oyj
Excellent diversification
The 3 months correlation between Capgemini and Nokia is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj 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 Nokia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Oyj has no effect on the direction of Capgemini i.e., Capgemini and Nokia Oyj go up and down completely randomly.
Pair Corralation between Capgemini and Nokia Oyj
Assuming the 90 days trading horizon Capgemini SE is expected to under-perform the Nokia Oyj. In addition to that, Capgemini is 1.46 times more volatile than Nokia Oyj. It trades about -0.27 of its total potential returns per unit of risk. Nokia Oyj is currently generating about -0.34 per unit of volatility. If you would invest 449.00 in Nokia Oyj on August 27, 2024 and sell it today you would lose (49.00) from holding Nokia Oyj or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. Nokia Oyj
Performance |
| Timeline |
| Capgemini SE |
| Nokia Oyj |
Capgemini and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Nokia Oyj
The main advantage of trading using opposite Capgemini and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Nokia Oyj 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 Nokia Oyj will offset losses from the drop in Nokia Oyj's long position.| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |