Correlation Between Capgemini and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Capgemini and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Capgemini and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and KIMBALL ELECTRONICS.
Diversification Opportunities for Capgemini and KIMBALL ELECTRONICS
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capgemini and KIMBALL is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS 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 are associated (or correlated) with KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of Capgemini i.e., Capgemini and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Capgemini and KIMBALL ELECTRONICS
Assuming the 90 days horizon Capgemini SE is expected to generate 0.64 times more return on investment than KIMBALL ELECTRONICS. However, Capgemini SE is 1.56 times less risky than KIMBALL ELECTRONICS. It trades about 0.01 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest 15,967 in Capgemini SE on September 12, 2024 and sell it today you would lose (87.00) from holding Capgemini SE or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Capgemini SE |
| KIMBALL ELECTRONICS |
Capgemini and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and KIMBALL ELECTRONICS
The main advantage of trading using opposite Capgemini and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| Capgemini vs. KIMBALL ELECTRONICS | Capgemini vs. WillScot Mobile Mini | Capgemini vs. ARROW ELECTRONICS | Capgemini vs. STORE ELECTRONIC |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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