Correlation Between Dow Jones and Capgemini
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Capgemini SE, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Capgemini.
Diversification Opportunities for Dow Jones and Capgemini
Pay attention - limited upside
The 3 months correlation between Dow and Capgemini is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Capgemini go up and down completely randomly.
Pair Corralation between Dow Jones and Capgemini
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.42 times more return on investment than Capgemini. However, Dow Jones Industrial is 2.4 times less risky than Capgemini. It trades about 0.12 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.01 per unit of risk. If you would invest 3,387,678 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 1,103,387 from holding Dow Jones Industrial or generate 32.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.89% |
| Values | Daily Returns |
Dow Jones Industrial vs. Capgemini SE
Performance |
| Timeline |
Dow Jones and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Capgemini SE
Pair trading matchups for Capgemini
Pair Trading with Dow Jones and Capgemini
The main advantage of trading using opposite Dow Jones and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Capgemini vs. Air New Zealand | Capgemini vs. ADRIATIC METALS LS 013355 | Capgemini vs. Enter Air SA | Capgemini vs. LION ONE METALS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |