Correlation Between Computer Task and Capgemini
Can any of the company-specific risk be diversified away by investing in both Computer Task 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 Computer Task and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Task Group and Capgemini SE ADR, you can compare the effects of market volatilities on Computer Task 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 Computer Task with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Task and Capgemini.
Diversification Opportunities for Computer Task and Capgemini
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Computer and Capgemini is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Computer Task Group 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 Computer Task 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 Computer Task Group 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 Computer Task i.e., Computer Task and Capgemini go up and down completely randomly.
Pair Corralation between Computer Task and Capgemini
Considering the 90-day investment horizon Computer Task Group is expected to generate 1.2 times more return on investment than Capgemini. However, Computer Task is 1.2 times more volatile than Capgemini SE ADR. It trades about 0.04 of its potential returns per unit of risk. Capgemini SE ADR is currently generating about -0.01 per unit of risk. If you would invest 721.00 in Computer Task Group on October 25, 2024 and sell it today you would earn a total of 47.00 from holding Computer Task Group or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 23.73% |
| Values | Daily Returns |
Computer Task Group vs. Capgemini SE ADR
Performance |
| Timeline |
| Computer Task Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Capgemini SE ADR |
Computer Task and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Task and Capgemini
The main advantage of trading using opposite Computer Task and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Task 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.| Computer Task vs. The Hackett Group | Computer Task vs. CSP Inc | Computer Task vs. Nayax | Computer Task vs. Formula Systems 1985 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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