Correlation Between LION ONE and Capgemini
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LION ONE METALS and Capgemini SE, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and Capgemini.
Diversification Opportunities for LION ONE and Capgemini
Average diversification
The 3 months correlation between LION and Capgemini is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and Capgemini go up and down completely randomly.
Pair Corralation between LION ONE and Capgemini
Assuming the 90 days trading horizon LION ONE METALS is expected to generate 2.75 times more return on investment than Capgemini. However, LION ONE is 2.75 times more volatile than Capgemini SE. It trades about -0.05 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.31 per unit of risk. If you would invest 21.00 in LION ONE METALS on September 3, 2024 and sell it today you would lose (1.00) from holding LION ONE METALS or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. Capgemini SE
Performance |
| Timeline |
| LION ONE METALS |
| Capgemini SE |
LION ONE and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and Capgemini
The main advantage of trading using opposite LION ONE and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. HomeToGo SE | LION ONE vs. NORTHEAST UTILITIES | LION ONE vs. SBM OFFSHORE | LION ONE vs. Zijin Mining Group |
| Capgemini vs. Fair Isaac Corp | Capgemini vs. TITANIUM TRANSPORTGROUP | Capgemini vs. Wizz Air Holdings | Capgemini vs. Liberty Broadband |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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