Correlation Between Capgemini and Crypto
Can any of the company-specific risk be diversified away by investing in both Capgemini and Crypto 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 Crypto 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 Crypto Co, you can compare the effects of market volatilities on Capgemini and Crypto 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 Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Crypto.
Diversification Opportunities for Capgemini and Crypto
Significant diversification
The 3 months correlation between Capgemini and Crypto is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto 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 Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of Capgemini i.e., Capgemini and Crypto go up and down completely randomly.
Pair Corralation between Capgemini and Crypto
Assuming the 90 days horizon Capgemini SE ADR is expected to under-perform the Crypto. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capgemini SE ADR is 6.81 times less risky than Crypto. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Crypto Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Crypto Co on October 25, 2024 and sell it today you would lose (0.03) from holding Crypto Co or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE ADR vs. Crypto Co
Performance |
| Timeline |
| Capgemini SE ADR |
| Crypto |
Capgemini and Crypto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Crypto
The main advantage of trading using opposite Capgemini and Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Crypto 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 Crypto will offset losses from the drop in Crypto's long position.| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
| Crypto vs. Direct Communication Solutions | Crypto vs. Datametrex AI Limited | Crypto vs. CSE Global Limited | Crypto vs. Appen Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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