Correlation Between AGRICUL BK and Capgemini
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK 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 AGRICUL BK and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and Capgemini SE, you can compare the effects of market volatilities on AGRICUL BK 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 AGRICUL BK with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Capgemini.
Diversification Opportunities for AGRICUL BK and Capgemini
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGRICUL and Capgemini is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and AGRICUL BK 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 AGRICUL BK CHINA H 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 AGRICUL BK i.e., AGRICUL BK and Capgemini go up and down completely randomly.
Pair Corralation between AGRICUL BK and Capgemini
Assuming the 90 days trading horizon AGRICUL BK CHINA H is expected to generate 1.04 times more return on investment than Capgemini. However, AGRICUL BK is 1.04 times more volatile than Capgemini SE. It trades about 0.01 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.35 per unit of risk. If you would invest 46.00 in AGRICUL BK CHINA H on August 25, 2024 and sell it today you would earn a total of 0.00 from holding AGRICUL BK CHINA H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Capgemini SE
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Capgemini SE |
AGRICUL BK and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Capgemini
The main advantage of trading using opposite AGRICUL BK and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK 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.| AGRICUL BK vs. OAKTRSPECLENDNEW | AGRICUL BK vs. National Bank Holdings | AGRICUL BK vs. TFS FINANCIAL | AGRICUL BK vs. Chiba Bank |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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