Correlation Between Capgemini and CSE Global
Can any of the company-specific risk be diversified away by investing in both Capgemini and CSE Global 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 CSE Global 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 CSE Global Limited, you can compare the effects of market volatilities on Capgemini and CSE Global 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 CSE Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and CSE Global.
Diversification Opportunities for Capgemini and CSE Global
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capgemini and CSE is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and CSE Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSE Global 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 CSE Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSE Global Limited has no effect on the direction of Capgemini i.e., Capgemini and CSE Global go up and down completely randomly.
Pair Corralation between Capgemini and CSE Global
Assuming the 90 days horizon Capgemini SE ADR is expected to under-perform the CSE Global. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capgemini SE ADR is 1.47 times less risky than CSE Global. The pink sheet trades about -0.2 of its potential returns per unit of risk. The CSE Global Limited is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 37.00 in CSE Global Limited on August 31, 2024 and sell it today you would lose (4.00) from holding CSE Global Limited or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE ADR vs. CSE Global Limited
Performance |
| Timeline |
| Capgemini SE ADR |
| CSE Global Limited |
Capgemini and CSE Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and CSE Global
The main advantage of trading using opposite Capgemini and CSE Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, CSE Global 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 CSE Global will offset losses from the drop in CSE Global's long position.| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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