Correlation Between Capgemini and Atos Origin

Can any of the company-specific risk be diversified away by investing in both Capgemini and Atos Origin 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 Atos Origin 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 Atos Origin SA, you can compare the effects of market volatilities on Capgemini and Atos Origin 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 Atos Origin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Atos Origin.

Diversification Opportunities for Capgemini and Atos Origin

-0.17

Correlation Coefficient

Capgemini  Atos Origin

Good diversification

The 3 months correlation between Capgemini and Atos is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and Atos Origin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos Origin SA 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 Atos Origin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos Origin SA has no effect on the direction of Capgemini i.e., Capgemini and Atos Origin go up and down completely randomly.

Pair Corralation between Capgemini and Atos Origin

Assuming the 90 days horizon Capgemini SE ADR is expected to generate 0.19 times more return on investment than Atos Origin. However, Capgemini SE ADR is 5.14 times less risky than Atos Origin. It trades about -0.01 of its potential returns per unit of risk. Atos Origin SA is currently generating about -0.26 per unit of risk. If you would invest  3,227  in Capgemini SE ADR on December 30, 2024 and sell it today you would lose (86.00) from holding Capgemini SE ADR or give up 2.67% of portfolio value over 90 days.

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

Capgemini SE ADR  vs.  Atos Origin SA

Capgemini SE ADR

Risk-Adjusted Performance

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 fairly strong primary indicators, Capgemini is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Atos Origin SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atos Origin SA 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 basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Capgemini and Atos Origin

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

The idea behind Capgemini SE ADR and Atos Origin SA 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.