Correlation Between Capgemini and AgileThought

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

Diversification Opportunities for Capgemini and AgileThought

0.9

Correlation Coefficient

Capgemini  AgileThought

Almost no diversification

The 3 months correlation between Capgemini and AgileThought is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE ADR and AgileThought in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgileThought 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 AgileThought. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgileThought has no effect on the direction of Capgemini i.e., Capgemini and AgileThought go up and down completely randomly.

Pair Corralation between Capgemini and AgileThought

If you would invest  3,214  in Capgemini SE ADR on September 23, 2024 and sell it today you would earn a total of  21.00  from holding Capgemini SE ADR or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	4.76%
Values	Daily Returns

Capgemini SE ADR  vs.  AgileThought

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 weak 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.

AgileThought

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgileThought has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, AgileThought is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Capgemini and AgileThought

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

The idea behind Capgemini SE ADR and AgileThought 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.