Correlation Between Hackett and Capgemini
Can any of the company-specific risk be diversified away by investing in both Hackett 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 Hackett and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hackett Group and Capgemini SE ADR, you can compare the effects of market volatilities on Hackett 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 Hackett with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hackett and Capgemini.
Diversification Opportunities for Hackett and Capgemini
Excellent diversification
The 3 months correlation between Hackett and Capgemini is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett 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 Hackett 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 The Hackett 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 Hackett i.e., Hackett and Capgemini go up and down completely randomly.
Pair Corralation between Hackett and Capgemini
Given the investment horizon of 90 days The Hackett Group is expected to generate 1.1 times more return on investment than Capgemini. However, Hackett is 1.1 times more volatile than Capgemini SE ADR. It trades about 0.05 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 2,176 in The Hackett Group on October 25, 2024 and sell it today you would earn a total of 842.00 from holding The Hackett Group or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Hackett Group vs. Capgemini SE ADR
Performance |
| Timeline |
| Hackett Group |
| Capgemini SE ADR |
Hackett and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hackett and Capgemini
The main advantage of trading using opposite Hackett and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hackett 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.| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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