Correlation Between Capgemini and Fact

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

By analyzing existing cross correlation between Capgemini SE ADR and Fact Inc, you can compare the effects of market volatilities on Capgemini and Fact 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 Fact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Fact.

Diversification Opportunities for Capgemini and Fact

0.0

Correlation Coefficient

Capgemini  Fact

Pay attention - limited upside

The 3 months correlation between Capgemini and Fact is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and Fact Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fact Inc 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 ADR are associated (or correlated) with Fact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fact Inc has no effect on the direction of Capgemini i.e., Capgemini and Fact go up and down completely randomly.

Pair Corralation between Capgemini and Fact

If you would invest  0.01  in Fact Inc on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Fact Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Capgemini SE ADR  vs.  Fact Inc

Capgemini SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capgemini SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain fairly 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.

Fact Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fact Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fact is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Capgemini and Fact

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

The idea behind Capgemini SE ADR and Fact Inc 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.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.