Correlation Between Capgemini and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Capgemini and Fair Isaac 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 Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and Fair Isaac Corp, you can compare the effects of market volatilities on Capgemini and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Fair Isaac.
Diversification Opportunities for Capgemini and Fair Isaac
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capgemini and Fair is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of Capgemini i.e., Capgemini and Fair Isaac go up and down completely randomly.
Pair Corralation between Capgemini and Fair Isaac
Assuming the 90 days horizon Capgemini SE is expected to under-perform the Fair Isaac. But the stock apears to be less risky and, when comparing its historical volatility, Capgemini SE is 1.04 times less risky than Fair Isaac. The stock trades about -0.09 of its potential returns per unit of risk. The Fair Isaac Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 121,250 in Fair Isaac Corp on September 3, 2024 and sell it today you would earn a total of 105,250 from holding Fair Isaac Corp or generate 86.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. Fair Isaac Corp
Performance |
| Timeline |
| Capgemini SE |
| Fair Isaac Corp |
Capgemini and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Fair Isaac
The main advantage of trading using opposite Capgemini and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Capgemini vs. Fair Isaac Corp | Capgemini vs. TITANIUM TRANSPORTGROUP | Capgemini vs. Wizz Air Holdings | Capgemini vs. Liberty Broadband |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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