Correlation Between Travelers Companies and Capgemini
Can any of the company-specific risk be diversified away by investing in both Travelers Companies 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 Travelers Companies and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Capgemini SE, you can compare the effects of market volatilities on Travelers Companies 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 Travelers Companies with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Capgemini.
Diversification Opportunities for Travelers Companies and Capgemini
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Travelers and Capgemini is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Travelers Companies 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 Travelers Companies 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 Travelers Companies i.e., Travelers Companies and Capgemini go up and down completely randomly.
Pair Corralation between Travelers Companies and Capgemini
Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.67 times more return on investment than Capgemini. However, The Travelers Companies is 1.49 times less risky than Capgemini. It trades about 0.13 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.07 per unit of risk. If you would invest 20,648 in The Travelers Companies on September 3, 2024 and sell it today you would earn a total of 5,703 from holding The Travelers Companies or generate 27.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Capgemini SE
Performance |
| Timeline |
| The Travelers Companies |
| Capgemini SE |
Travelers Companies and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Capgemini
The main advantage of trading using opposite Travelers Companies and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies 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.| Travelers Companies vs. SPACE | Travelers Companies vs. Ampleforth | Travelers Companies vs. ionet | Travelers Companies vs. KIN |
| Capgemini vs. CSE Global Limited | Capgemini vs. Deveron Corp | Capgemini vs. Appen Limited | Capgemini vs. Appen Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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