Correlation Between A10 Network and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both A10 Network and Dassault Systemes 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 A10 Network and Dassault Systemes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A10 Network and Dassault Systemes SE, you can compare the effects of market volatilities on A10 Network and Dassault Systemes 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 A10 Network with a short position of Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Dassault Systemes.
Diversification Opportunities for A10 Network and Dassault Systemes
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between A10 and Dassault is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Dassault Systemes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes and A10 Network 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 A10 Network are associated (or correlated) with Dassault Systemes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systemes has no effect on the direction of A10 Network i.e., A10 Network and Dassault Systemes go up and down completely randomly.
Pair Corralation between A10 Network and Dassault Systemes
Given the investment horizon of 90 days A10 Network is expected to generate 0.96 times more return on investment than Dassault Systemes. However, A10 Network is 1.05 times less risky than Dassault Systemes. It trades about 0.21 of its potential returns per unit of risk. Dassault Systemes SE is currently generating about 0.07 per unit of risk. If you would invest 1,295 in A10 Network on December 10, 2024 and sell it today you would earn a total of 643.00 from holding A10 Network or generate 49.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.62% |
| Values | Daily Returns |
A10 Network vs. Dassault Systemes SE
Performance |
| Timeline |
| A10 Network |
| Dassault Systemes |
A10 Network and Dassault Systemes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A10 Network and Dassault Systemes
The main advantage of trading using opposite A10 Network and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network position performs unexpectedly, Dassault Systemes 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 Dassault Systemes will offset losses from the drop in Dassault Systemes' long position.| A10 Network vs. Evertec | ||
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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