Correlation Between Tautachrome and Capgemini

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

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

Diversification Opportunities for Tautachrome and Capgemini

0.0

Correlation Coefficient

Tautachrome  Capgemini

Pay attention - limited upside

The 3 months correlation between Tautachrome and Capgemini is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tautachrome and Capgemini SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE ADR and Tautachrome 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 Tautachrome 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 ADR has no effect on the direction of Tautachrome i.e., Tautachrome and Capgemini go up and down completely randomly.

Pair Corralation between Tautachrome and Capgemini

If you would invest  0.01  in Tautachrome on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Tautachrome or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tautachrome  vs.  Capgemini SE ADR

Tautachrome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tautachrome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Tautachrome is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

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 inconsistent 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.

Pair Trading with Tautachrome and Capgemini

The main advantage of trading using opposite Tautachrome and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tautachrome 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.

The idea behind Tautachrome and Capgemini SE ADR 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.