Correlation Between Capgemini and FONIX MOBILE

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

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

Diversification Opportunities for Capgemini and FONIX MOBILE

0.37

Correlation Coefficient

Capgemini  FONIX MOBILE

Weak diversification

The 3 months correlation between Capgemini and FONIX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC 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 FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of Capgemini i.e., Capgemini and FONIX MOBILE go up and down completely randomly.

Pair Corralation between Capgemini and FONIX MOBILE

Assuming the 90 days horizon Capgemini SE is expected to generate 0.75 times more return on investment than FONIX MOBILE. However, Capgemini SE is 1.33 times less risky than FONIX MOBILE. It trades about -0.04 of its potential returns per unit of risk. FONIX MOBILE PLC is currently generating about -0.11 per unit of risk. If you would invest  15,485  in Capgemini SE on December 22, 2024 and sell it today you would lose (995.00) from holding Capgemini SE or give up 6.43% of portfolio value over 90 days.

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

Capgemini SE  vs.  FONIX MOBILE PLC

Capgemini SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capgemini SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Capgemini is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FONIX MOBILE PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days FONIX MOBILE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Capgemini and FONIX MOBILE

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

The idea behind Capgemini SE and FONIX MOBILE PLC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.