Correlation Between DoorDash, and Capgemini

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

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

Diversification Opportunities for DoorDash, and Capgemini

-0.91

Correlation Coefficient

DoorDash,  Capgemini

Pay attention - limited upside

The 3 months correlation between DoorDash, and Capgemini is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding DoorDash, Class A and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and DoorDash, 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 DoorDash, Class A 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 has no effect on the direction of DoorDash, i.e., DoorDash, and Capgemini go up and down completely randomly.

Pair Corralation between DoorDash, and Capgemini

Given the investment horizon of 90 days DoorDash, Class A is expected to generate 1.12 times more return on investment than Capgemini. However, DoorDash, is 1.12 times more volatile than Capgemini SE. It trades about 0.11 of its potential returns per unit of risk. Capgemini SE is currently generating about 0.0 per unit of risk. If you would invest  5,234  in DoorDash, Class A on October 4, 2024 and sell it today you would earn a total of  11,831  from holding DoorDash, Class A or generate 226.04% return on investment over 90 days.

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

DoorDash, Class A  vs.  Capgemini SE

DoorDash, Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DoorDash, Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DoorDash, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 fragile 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.

Pair Trading with DoorDash, and Capgemini

The main advantage of trading using opposite DoorDash, and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DoorDash, 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 DoorDash, Class A and Capgemini SE 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 Transaction History module to view history of all your transactions and understand their impact on performance.