Correlation Between SAP SE and Capgemini

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

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

Diversification Opportunities for SAP SE and Capgemini

0.56

Correlation Coefficient

SAP SE  Capgemini

Very weak diversification

The 3 months correlation between SAP and Capgemini is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SAP SE and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and SAP SE 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 SAP SE 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 SAP SE i.e., SAP SE and Capgemini go up and down completely randomly.

Pair Corralation between SAP SE and Capgemini

Assuming the 90 days horizon SAP SE is expected to generate 0.68 times more return on investment than Capgemini. However, SAP SE is 1.48 times less risky than Capgemini. It trades about 0.0 of its potential returns per unit of risk. Capgemini SE is currently generating about 0.0 per unit of risk. If you would invest  28,655  in SAP SE on May 1, 2025 and sell it today you would lose (85.00) from holding SAP SE or give up 0.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SAP SE  vs.  Capgemini SE

SAP SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAP SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, SAP SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SAP SE and Capgemini

The main advantage of trading using opposite SAP SE and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAP SE 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 SAP SE 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.