Correlation Between Capgemini and ASM International

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

By analyzing existing cross correlation between Capgemini SE and ASM International NV, you can compare the effects of market volatilities on Capgemini and ASM International 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 ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and ASM International.

Diversification Opportunities for Capgemini and ASM International

0.64

Correlation Coefficient

Capgemini  ASM International

Poor diversification

The 3 months correlation between Capgemini and ASM is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of Capgemini i.e., Capgemini and ASM International go up and down completely randomly.

Pair Corralation between Capgemini and ASM International

Assuming the 90 days horizon Capgemini is expected to generate 7.55 times less return on investment than ASM International. But when comparing it to its historical volatility, Capgemini SE is 1.18 times less risky than ASM International. It trades about 0.01 of its potential returns per unit of risk. ASM International NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  44,032  in ASM International NV on April 29, 2025 and sell it today you would earn a total of  6,366  from holding ASM International NV or generate 14.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Capgemini SE  vs.  ASM International NV

Capgemini SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capgemini SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Capgemini is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

ASM International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ASM International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capgemini and ASM International

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

The idea behind Capgemini SE and ASM International NV 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.