Correlation Between Infosys and Capgemini
Can any of the company-specific risk be diversified away by investing in both Infosys 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 Infosys and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infosys Limited and Capgemini SE, you can compare the effects of market volatilities on Infosys 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 Infosys with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infosys and Capgemini.
Diversification Opportunities for Infosys and Capgemini
Excellent diversification
The 3 months correlation between Infosys and Capgemini is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Infosys Limited and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Infosys 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 Infosys 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 has no effect on the direction of Infosys i.e., Infosys and Capgemini go up and down completely randomly.
Pair Corralation between Infosys and Capgemini
Assuming the 90 days horizon Infosys Limited is expected to under-perform the Capgemini. In addition to that, Infosys is 2.65 times more volatile than Capgemini SE. It trades about -0.04 of its total potential returns per unit of risk. Capgemini SE is currently generating about 0.11 per unit of volatility. If you would invest 15,530 in Capgemini SE on October 26, 2024 and sell it today you would earn a total of 745.00 from holding Capgemini SE or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infosys Limited vs. Capgemini SE
Performance |
| Timeline |
| Infosys Limited |
| Capgemini SE |
Infosys and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infosys and Capgemini
The main advantage of trading using opposite Infosys and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infosys 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.| Infosys vs. alstria office REIT AG | Infosys vs. CHRYSALIS INVESTMENTS LTD | Infosys vs. KENEDIX OFFICE INV | Infosys vs. REINET INVESTMENTS SCA |
| Capgemini vs. UNIQA INSURANCE GR | Capgemini vs. Webster Financial | Capgemini vs. CHIBA BANK | Capgemini vs. Broadridge Financial Solutions |
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 Stocks Directory module to find actively traded stocks across global markets.
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