Correlation Between Satellogic Warrant and Capgemini

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

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

Diversification Opportunities for Satellogic Warrant and Capgemini

-0.44

Correlation Coefficient

Satellogic Warrant  Capgemini

Very good diversification

The 3 months correlation between Satellogic and Capgemini is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Satellogic Warrant and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and Satellogic Warrant 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 Satellogic Warrant 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 Satellogic Warrant i.e., Satellogic Warrant and Capgemini go up and down completely randomly.

Pair Corralation between Satellogic Warrant and Capgemini

Assuming the 90 days horizon Satellogic Warrant is expected to generate 13.17 times more return on investment than Capgemini. However, Satellogic Warrant is 13.17 times more volatile than Capgemini SE. It trades about 0.28 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.15 per unit of risk. If you would invest  5.22  in Satellogic Warrant on October 4, 2024 and sell it today you would earn a total of  34.78  from holding Satellogic Warrant or generate 666.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	67.74%
Values	Daily Returns

Satellogic Warrant  vs.  Capgemini SE

Satellogic Warrant

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Satellogic Warrant are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, Satellogic Warrant showed 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 Satellogic Warrant and Capgemini

The main advantage of trading using opposite Satellogic Warrant and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satellogic Warrant 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 Satellogic Warrant 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.