Correlation Between Capgemini and Appen
Can any of the company-specific risk be diversified away by investing in both Capgemini and Appen 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 Appen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE ADR and Appen Limited, you can compare the effects of market volatilities on Capgemini and Appen 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 Appen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Appen.
Diversification Opportunities for Capgemini and Appen
Good diversification
The 3 months correlation between Capgemini and Appen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and Appen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appen Limited 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 ADR are associated (or correlated) with Appen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appen Limited has no effect on the direction of Capgemini i.e., Capgemini and Appen go up and down completely randomly.
Pair Corralation between Capgemini and Appen
Assuming the 90 days horizon Capgemini SE ADR is expected to generate 0.19 times more return on investment than Appen. However, Capgemini SE ADR is 5.2 times less risky than Appen. It trades about 0.43 of its potential returns per unit of risk. Appen Limited is currently generating about -0.02 per unit of risk. If you would invest 3,204 in Capgemini SE ADR on November 4, 2024 and sell it today you would earn a total of 437.00 from holding Capgemini SE ADR or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE ADR vs. Appen Limited
Performance |
| Timeline |
| Capgemini SE ADR |
| Appen Limited |
Capgemini and Appen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Appen
The main advantage of trading using opposite Capgemini and Appen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Appen 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 Appen will offset losses from the drop in Appen's long position.| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
| Appen vs. Atos Origin SA | Appen vs. Aurora Innovation | Appen vs. Appen Limited | Appen vs. Direct Communication Solutions |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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