Correlation Between Kornit Digital and Capgemini
Can any of the company-specific risk be diversified away by investing in both Kornit Digital 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 Kornit Digital and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kornit Digital and Capgemini SE, you can compare the effects of market volatilities on Kornit Digital 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 Kornit Digital with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kornit Digital and Capgemini.
Diversification Opportunities for Kornit Digital and Capgemini
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kornit and Capgemini is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kornit Digital and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Kornit Digital 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 Kornit Digital 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 Kornit Digital i.e., Kornit Digital and Capgemini go up and down completely randomly.
Pair Corralation between Kornit Digital and Capgemini
Given the investment horizon of 90 days Kornit Digital is expected to generate 1.61 times more return on investment than Capgemini. However, Kornit Digital is 1.61 times more volatile than Capgemini SE. It trades about 0.03 of its potential returns per unit of risk. Capgemini SE is currently generating about 0.0 per unit of risk. If you would invest 2,674 in Kornit Digital on October 4, 2024 and sell it today you would earn a total of 401.00 from holding Kornit Digital or generate 15.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kornit Digital vs. Capgemini SE
Performance |
Timeline |
Kornit Digital |
Capgemini SE |
Kornit Digital and Capgemini Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kornit Digital and Capgemini
The main advantage of trading using opposite Kornit Digital and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kornit Digital 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.Kornit Digital vs. Pentair PLC | Kornit Digital vs. Parker Hannifin | Kornit Digital vs. Emerson Electric | Kornit Digital vs. Smith AO |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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