Correlation Between Capgemini and Capgemini
Can any of the company-specific risk be diversified away by investing in both Capgemini and Capgemini 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 Capgemini 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 Capgemini SE, you can compare the effects of market volatilities on Capgemini and Capgemini 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 Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Capgemini.
Diversification Opportunities for Capgemini and Capgemini
No risk reduction
The 3 months correlation between Capgemini and Capgemini is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE 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 Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of Capgemini i.e., Capgemini and Capgemini go up and down completely randomly.
Pair Corralation between Capgemini and Capgemini
Assuming the 90 days horizon Capgemini is expected to generate 4.17 times less return on investment than Capgemini. But when comparing it to its historical volatility, Capgemini SE ADR is 1.34 times less risky than Capgemini. It trades about 0.0 of its potential returns per unit of risk. Capgemini SE is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 16,972 in Capgemini SE on August 27, 2024 and sell it today you would lose (1,583) from holding Capgemini SE or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE ADR vs. Capgemini SE
Performance |
| Timeline |
| Capgemini SE ADR |
| Capgemini SE |
Capgemini and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Capgemini
The main advantage of trading using opposite Capgemini and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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