Correlation Between Capgemini and FONIX MOBILE

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

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

Diversification Opportunities for Capgemini and FONIX MOBILE

0.51

Correlation Coefficient

Capgemini  FONIX MOBILE

Very weak diversification

The 3 months correlation between Capgemini and FONIX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC and Capgemini 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 Capgemini SE are associated (or correlated) with FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of Capgemini i.e., Capgemini and FONIX MOBILE go up and down completely randomly.

Pair Corralation between Capgemini and FONIX MOBILE

Assuming the 90 days horizon Capgemini SE is expected to under-perform the FONIX MOBILE. But the stock apears to be less risky and, when comparing its historical volatility, Capgemini SE is 1.24 times less risky than FONIX MOBILE. The stock trades about -0.01 of its potential returns per unit of risk. The FONIX MOBILE PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  208.00  in FONIX MOBILE PLC on April 20, 2025 and sell it today you would earn a total of  46.00  from holding FONIX MOBILE PLC or generate 22.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Capgemini SE  vs.  FONIX MOBILE PLC

Capgemini SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capgemini SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Capgemini reported solid returns over the last few months and may actually be approaching a breakup point.

FONIX MOBILE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FONIX MOBILE PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FONIX MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capgemini and FONIX MOBILE

The main advantage of trading using opposite Capgemini and FONIX MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini position performs unexpectedly, FONIX MOBILE 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 FONIX MOBILE will offset losses from the drop in FONIX MOBILE's long position.

The idea behind Capgemini SE and FONIX MOBILE PLC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.