Correlation Between Capgemini and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both Capgemini 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 Capgemini and Dassault Systemes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capgemini SE and Dassault Systemes SE, you can compare the effects of market volatilities on Capgemini 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 Capgemini with a short position of Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capgemini and Dassault Systemes.
Diversification Opportunities for Capgemini and Dassault Systemes
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capgemini and Dassault is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Capgemini SE and Dassault Systemes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes 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 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 Capgemini i.e., Capgemini and Dassault Systemes go up and down completely randomly.
Pair Corralation between Capgemini and Dassault Systemes
Assuming the 90 days trading horizon Capgemini is expected to generate 1.67 times less return on investment than Dassault Systemes. In addition to that, Capgemini is 1.01 times more volatile than Dassault Systemes SE. It trades about 0.01 of its total potential returns per unit of risk. Dassault Systemes SE is currently generating about 0.01 per unit of volatility. If you would invest 3,705 in Dassault Systemes SE on November 2, 2024 and sell it today you would earn a total of 65.00 from holding Dassault Systemes SE or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capgemini SE vs. Dassault Systemes SE
Performance |
| Timeline |
| Capgemini SE |
| Dassault Systemes |
Capgemini and Dassault Systemes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capgemini and Dassault Systemes
The main advantage of trading using opposite Capgemini and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capgemini 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.| Capgemini vs. Atos SE | Capgemini vs. Compagnie de Saint Gobain | Capgemini vs. Pernod Ricard SA | Capgemini vs. Bouygues SA |
| Dassault Systemes vs. Thales SA | Dassault Systemes vs. Safran SA | Dassault Systemes vs. Air Liquide SA | Dassault Systemes vs. Capgemini SE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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