Correlation Between CSE Global and Capgemini
Can any of the company-specific risk be diversified away by investing in both CSE Global 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 CSE Global and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSE Global Limited and Capgemini SE ADR, you can compare the effects of market volatilities on CSE Global 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 CSE Global with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSE Global and Capgemini.
Diversification Opportunities for CSE Global and Capgemini
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSE and Capgemini is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CSE Global Limited 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 CSE Global 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 CSE Global Limited 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 CSE Global i.e., CSE Global and Capgemini go up and down completely randomly.
Pair Corralation between CSE Global and Capgemini
Assuming the 90 days horizon CSE Global is expected to generate 1.32 times less return on investment than Capgemini. In addition to that, CSE Global is 4.59 times more volatile than Capgemini SE ADR. It trades about 0.03 of its total potential returns per unit of risk. Capgemini SE ADR is currently generating about 0.19 per unit of volatility. If you would invest 3,267 in Capgemini SE ADR on October 25, 2024 and sell it today you would earn a total of 164.00 from holding Capgemini SE ADR or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
CSE Global Limited vs. Capgemini SE ADR
Performance |
| Timeline |
| CSE Global Limited |
| Capgemini SE ADR |
CSE Global and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSE Global and Capgemini
The main advantage of trading using opposite CSE Global and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSE Global 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.| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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