Correlation Between Quisitive Technology and Capgemini

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

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

Diversification Opportunities for Quisitive Technology and Capgemini

0.23

Correlation Coefficient

Quisitive Technology  Capgemini

Modest diversification

The 3 months correlation between Quisitive and Capgemini is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Quisitive Technology Solutions and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Quisitive Technology 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 Quisitive Technology Solutions 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 Quisitive Technology i.e., Quisitive Technology and Capgemini go up and down completely randomly.

Pair Corralation between Quisitive Technology and Capgemini

Assuming the 90 days horizon Quisitive Technology Solutions is expected to generate 1.95 times more return on investment than Capgemini. However, Quisitive Technology is 1.95 times more volatile than Capgemini SE. It trades about 0.14 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.02 per unit of risk. If you would invest  26.00  in Quisitive Technology Solutions on December 23, 2024 and sell it today you would earn a total of  13.00  from holding Quisitive Technology Solutions or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.8%
Values	Daily Returns

Quisitive Technology Solutions  vs.  Capgemini SE

Quisitive Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quisitive Technology Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Quisitive Technology reported solid returns over the last few months and may actually be approaching a breakup point.

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 primary indicators, Capgemini is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Quisitive Technology and Capgemini

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

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.