Correlation Between Capgemini and XTM
Can any of the company-specific risk be diversified away by investing in both Capgemini and XTM 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 XTM 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 XTM Inc, you can compare the effects of market volatilities on Capgemini and XTM 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 XTM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and XTM.
Diversification Opportunities for Capgemini and XTM
Very good diversification
The 3 months correlation between Capgemini and XTM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and XTM Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTM Inc 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 XTM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTM Inc has no effect on the direction of Capgemini i.e., Capgemini and XTM go up and down completely randomly.
Pair Corralation between Capgemini and XTM
Assuming the 90 days horizon Capgemini SE ADR is expected to under-perform the XTM. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capgemini SE ADR is 24.16 times less risky than XTM. The pink sheet trades about 0.0 of its potential returns per unit of risk. The XTM Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11.00 in XTM Inc on August 31, 2024 and sell it today you would lose (5.86) from holding XTM Inc or give up 53.27% 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. XTM Inc
Performance |
| Timeline |
| Capgemini SE ADR |
| XTM Inc |
Capgemini and XTM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and XTM
The main advantage of trading using opposite Capgemini and XTM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, XTM 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 XTM will offset losses from the drop in XTM's long position.| Capgemini vs. Soluna Holdings Preferred | Capgemini vs. Crypto Co | Capgemini vs. ASGN Inc | Capgemini vs. Soluna Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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