Correlation Between Capgemini and Aubay Socit

Can any of the company-specific risk be diversified away by investing in both Capgemini and Aubay Socit 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 Capgemini and Aubay Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capgemini SE and Aubay Socit Anonyme, you can compare the effects of market volatilities on Capgemini and Aubay Socit 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 Capgemini with a short position of Aubay Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Aubay Socit.

Diversification Opportunities for Capgemini and Aubay Socit

-0.57

Correlation Coefficient

Capgemini  Aubay Socit

Excellent diversification

The 3 months correlation between Capgemini and Aubay is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Aubay Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aubay Socit Anonyme and Capgemini 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 Capgemini SE are associated (or correlated) with Aubay Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aubay Socit Anonyme has no effect on the direction of Capgemini i.e., Capgemini and Aubay Socit go up and down completely randomly.

Pair Corralation between Capgemini and Aubay Socit

Assuming the 90 days trading horizon Capgemini SE is expected to under-perform the Aubay Socit. In addition to that, Capgemini is 1.18 times more volatile than Aubay Socit Anonyme. It trades about -0.15 of its total potential returns per unit of risk. Aubay Socit Anonyme is currently generating about 0.24 per unit of volatility. If you would invest  3,462  in Aubay Socit Anonyme on September 4, 2024 and sell it today you would earn a total of  918.00  from holding Aubay Socit Anonyme or generate 26.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Capgemini SE  vs.  Aubay Socit Anonyme

Capgemini SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capgemini SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aubay Socit Anonyme

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aubay Socit Anonyme are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Aubay Socit sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capgemini and Aubay Socit

The main advantage of trading using opposite Capgemini and Aubay Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, Aubay Socit 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 Aubay Socit will offset losses from the drop in Aubay Socit's long position.

The idea behind Capgemini SE and Aubay Socit Anonyme pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.