Correlation Between POSaBIT Systems and Capgemini
Can any of the company-specific risk be diversified away by investing in both POSaBIT Systems 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 POSaBIT Systems and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSaBIT Systems Corp and Capgemini SE, you can compare the effects of market volatilities on POSaBIT Systems 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 POSaBIT Systems with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSaBIT Systems and Capgemini.
Diversification Opportunities for POSaBIT Systems and Capgemini
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSaBIT and Capgemini is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding POSaBIT Systems Corp and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and POSaBIT Systems 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 POSaBIT Systems Corp 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 POSaBIT Systems i.e., POSaBIT Systems and Capgemini go up and down completely randomly.
Pair Corralation between POSaBIT Systems and Capgemini
Assuming the 90 days horizon POSaBIT Systems Corp is expected to under-perform the Capgemini. In addition to that, POSaBIT Systems is 2.85 times more volatile than Capgemini SE. It trades about -0.05 of its total potential returns per unit of risk. Capgemini SE is currently generating about -0.13 per unit of volatility. If you would invest 20,255 in Capgemini SE on September 2, 2024 and sell it today you would lose (4,500) from holding Capgemini SE or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSaBIT Systems Corp vs. Capgemini SE
Performance |
| Timeline |
| POSaBIT Systems Corp |
| Capgemini SE |
POSaBIT Systems and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSaBIT Systems and Capgemini
The main advantage of trading using opposite POSaBIT Systems and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSaBIT Systems 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.| POSaBIT Systems vs. Mobi724 Global Solutions | POSaBIT Systems vs. Appen Limited | POSaBIT Systems vs. Deveron Corp | POSaBIT Systems vs. Appen Limited |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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