Correlation Between Capgemini and POSaBIT Systems
Can any of the company-specific risk be diversified away by investing in both Capgemini and POSaBIT Systems 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 POSaBIT Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and POSaBIT Systems Corp, you can compare the effects of market volatilities on Capgemini and POSaBIT Systems 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 POSaBIT Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and POSaBIT Systems.
Diversification Opportunities for Capgemini and POSaBIT Systems
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capgemini and POSaBIT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and POSaBIT Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSaBIT Systems Corp 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 POSaBIT Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSaBIT Systems Corp has no effect on the direction of Capgemini i.e., Capgemini and POSaBIT Systems go up and down completely randomly.
Pair Corralation between Capgemini and POSaBIT Systems
Assuming the 90 days horizon Capgemini SE is expected to generate 0.28 times more return on investment than POSaBIT Systems. However, Capgemini SE is 3.55 times less risky than POSaBIT Systems. It trades about 0.0 of its potential returns per unit of risk. POSaBIT Systems Corp is currently generating about -0.02 per unit of risk. If you would invest 17,288 in Capgemini SE on September 2, 2024 and sell it today you would lose (1,533) from holding Capgemini SE or give up 8.87% 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. POSaBIT Systems Corp
Performance |
| Timeline |
| Capgemini SE |
| POSaBIT Systems Corp |
Capgemini and POSaBIT Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and POSaBIT Systems
The main advantage of trading using opposite Capgemini and POSaBIT Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, POSaBIT Systems 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 POSaBIT Systems will offset losses from the drop in POSaBIT Systems' long position.| Capgemini vs. The Travelers Companies | Capgemini vs. Walt Disney | Capgemini vs. Home Depot | Capgemini vs. Procter Gamble |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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