Correlation Between Crypto and Capgemini
Can any of the company-specific risk be diversified away by investing in both Crypto and Capgemini 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 Crypto and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crypto Co and Capgemini SE ADR, you can compare the effects of market volatilities on Crypto and Capgemini 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 Crypto with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crypto and Capgemini.
Diversification Opportunities for Crypto and Capgemini
Average diversification
The 3 months correlation between Crypto and Capgemini is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Crypto Co and Capgemini SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE ADR and Crypto 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 Crypto Co are associated (or correlated) with Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE ADR has no effect on the direction of Crypto i.e., Crypto and Capgemini go up and down completely randomly.
Pair Corralation between Crypto and Capgemini
Given the investment horizon of 90 days Crypto Co is expected to under-perform the Capgemini. In addition to that, Crypto is 4.13 times more volatile than Capgemini SE ADR. It trades about -0.15 of its total potential returns per unit of risk. Capgemini SE ADR is currently generating about -0.36 per unit of volatility. If you would invest 3,817 in Capgemini SE ADR on August 28, 2024 and sell it today you would lose (603.00) from holding Capgemini SE ADR or give up 15.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crypto Co vs. Capgemini SE ADR
Performance |
| Timeline |
| Crypto |
| Capgemini SE ADR |
Crypto and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crypto and Capgemini
The main advantage of trading using opposite Crypto and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crypto position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| Crypto vs. Direct Communication Solutions | Crypto vs. Datametrex AI Limited | Crypto vs. CSE Global Limited | Crypto vs. Appen Limited |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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