Correlation Between Capgemini and 9F

Can any of the company-specific risk be diversified away by investing in both Capgemini and 9F 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 9F into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capgemini SE and 9F Inc, you can compare the effects of market volatilities on Capgemini and 9F 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 9F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and 9F.

Diversification Opportunities for Capgemini and 9F

0.77

Correlation Coefficient

Capgemini  9F

Poor diversification

The 3 months correlation between Capgemini and 9F is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and 9F Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 9F 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 are associated (or correlated) with 9F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 9F Inc has no effect on the direction of Capgemini i.e., Capgemini and 9F go up and down completely randomly.

Pair Corralation between Capgemini and 9F

Assuming the 90 days horizon Capgemini SE is expected to under-perform the 9F. But the pink sheet apears to be less risky and, when comparing its historical volatility, Capgemini SE is 2.26 times less risky than 9F. The pink sheet trades about -0.06 of its potential returns per unit of risk. The 9F Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  153.00  in 9F Inc on October 6, 2024 and sell it today you would earn a total of  0.00  from holding 9F Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Capgemini SE  vs.  9F Inc

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 primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

9F Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 9F Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Capgemini and 9F

The main advantage of trading using opposite Capgemini and 9F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, 9F 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 9F will offset losses from the drop in 9F's long position.

The idea behind Capgemini SE and 9F 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.