Correlation Between Capgemini and USU Software
Can any of the company-specific risk be diversified away by investing in both Capgemini and USU Software 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 USU Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and USU Software AG, you can compare the effects of market volatilities on Capgemini and USU Software 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 USU Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and USU Software.
Diversification Opportunities for Capgemini and USU Software
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capgemini and USU is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and USU Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USU Software AG 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 USU Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USU Software AG has no effect on the direction of Capgemini i.e., Capgemini and USU Software go up and down completely randomly.
Pair Corralation between Capgemini and USU Software
Assuming the 90 days horizon Capgemini SE is expected to under-perform the USU Software. But the stock apears to be less risky and, when comparing its historical volatility, Capgemini SE is 1.3 times less risky than USU Software. The stock trades about 0.0 of its potential returns per unit of risk. The USU Software AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,911 in USU Software AG on September 3, 2024 and sell it today you would earn a total of 299.00 from holding USU Software AG or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Capgemini SE vs. USU Software AG
Performance |
| Timeline |
| Capgemini SE |
| USU Software AG |
Capgemini and USU Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and USU Software
The main advantage of trading using opposite Capgemini and USU Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, USU Software 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 USU Software will offset losses from the drop in USU Software's long position.| Capgemini vs. Fair Isaac Corp | Capgemini vs. TITANIUM TRANSPORTGROUP | Capgemini vs. Wizz Air Holdings | Capgemini vs. Liberty Broadband |
| USU Software vs. International Business Machines | USU Software vs. FUJITSU LTD ADR | USU Software vs. Superior Plus Corp | USU Software vs. NMI 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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