Correlation Between Accenture Plc and Capgemini
Can any of the company-specific risk be diversified away by investing in both Accenture Plc 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 Accenture Plc and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Capgemini SE, you can compare the effects of market volatilities on Accenture Plc 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 Accenture Plc with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Capgemini.
Diversification Opportunities for Accenture Plc and Capgemini
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and Capgemini is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Accenture Plc 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 Accenture plc 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 has no effect on the direction of Accenture Plc i.e., Accenture Plc and Capgemini go up and down completely randomly.
Pair Corralation between Accenture Plc and Capgemini
Assuming the 90 days horizon Accenture plc is expected to generate 0.95 times more return on investment than Capgemini. However, Accenture plc is 1.05 times less risky than Capgemini. It trades about 0.05 of its potential returns per unit of risk. Capgemini SE is currently generating about 0.01 per unit of risk. If you would invest 25,878 in Accenture plc on November 5, 2024 and sell it today you would earn a total of 10,867 from holding Accenture plc or generate 41.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Accenture plc vs. Capgemini SE
Performance |
| Timeline |
| Accenture plc |
| Capgemini SE |
Accenture Plc and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Capgemini
The main advantage of trading using opposite Accenture Plc and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc 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.| Accenture Plc vs. UMC Electronics Co | Accenture Plc vs. TT Electronics PLC | Accenture Plc vs. ATOSS SOFTWARE | Accenture Plc vs. Kingdee International Software |
| Capgemini vs. HOCHSCHILD MINING | Capgemini vs. Chiba Bank | Capgemini vs. Commonwealth Bank of | Capgemini vs. Discover Financial Services |
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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