Correlation Between Dassault Systemes and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Dassault Systemes and Dow Jones 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 Dassault Systemes and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dassault Systemes SE and Dow Jones Industrial, you can compare the effects of market volatilities on Dassault Systemes and Dow Jones 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 Dassault Systemes with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systemes and Dow Jones.
Diversification Opportunities for Dassault Systemes and Dow Jones
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dassault and Dow is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Dassault Systemes 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 Dassault Systemes SE are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Dassault Systemes i.e., Dassault Systemes and Dow Jones go up and down completely randomly.
Pair Corralation between Dassault Systemes and Dow Jones
Assuming the 90 days horizon Dassault Systemes SE is expected to under-perform the Dow Jones. In addition to that, Dassault Systemes is 1.37 times more volatile than Dow Jones Industrial. It trades about -0.17 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of volatility. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dassault Systemes SE vs. Dow Jones Industrial
Performance |
| Timeline |
Dassault Systemes and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dassault Systemes SE
Pair trading matchups for Dassault Systemes
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Dassault Systemes and Dow Jones
The main advantage of trading using opposite Dassault Systemes and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Dassault Systemes vs. Salesforce | Dassault Systemes vs. SAP SE ADR | Dassault Systemes vs. ServiceNow | Dassault Systemes vs. Intuit Inc |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |