Correlation Between NCR Corp and Capgemini

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

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

Diversification Opportunities for NCR Corp and Capgemini

0.0

Correlation Coefficient

NCR Corp  Capgemini

Pay attention - limited upside

The 3 months correlation between NCR and Capgemini is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NCR Corp Pref and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and NCR Corp 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 NCR Corp Pref 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 NCR Corp i.e., NCR Corp and Capgemini go up and down completely randomly.

Pair Corralation between NCR Corp and Capgemini

If you would invest  15,788  in Capgemini SE on October 4, 2024 and sell it today you would earn a total of  201.00  from holding Capgemini SE or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

NCR Corp Pref  vs.  Capgemini SE

NCR Corp Pref

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NCR Corp Pref has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NCR Corp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

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 NCR Corp and Capgemini

The main advantage of trading using opposite NCR Corp and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCR Corp 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 NCR Corp Pref 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 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.