Correlation Between Dassault Systemes and Temenos Group
Can any of the company-specific risk be diversified away by investing in both Dassault Systemes and Temenos Group 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 Temenos Group 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 Temenos Group AG, you can compare the effects of market volatilities on Dassault Systemes and Temenos Group 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 Temenos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systemes and Temenos Group.
Diversification Opportunities for Dassault Systemes and Temenos Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dassault and Temenos is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Temenos Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Temenos Group AG 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 Temenos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Temenos Group AG has no effect on the direction of Dassault Systemes i.e., Dassault Systemes and Temenos Group go up and down completely randomly.
Pair Corralation between Dassault Systemes and Temenos Group
Assuming the 90 days horizon Dassault Systemes SE is expected to under-perform the Temenos Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dassault Systemes SE is 1.11 times less risky than Temenos Group. The pink sheet trades about -0.16 of its potential returns per unit of risk. The Temenos Group AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 6,942 in Temenos Group AG on August 25, 2024 and sell it today you would lose (300.00) from holding Temenos Group AG or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dassault Systemes SE vs. Temenos Group AG
Performance |
| Timeline |
| Dassault Systemes |
| Temenos Group AG |
Dassault Systemes and Temenos Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dassault Systemes and Temenos Group
The main advantage of trading using opposite Dassault Systemes and Temenos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes position performs unexpectedly, Temenos Group 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 Temenos Group will offset losses from the drop in Temenos Group's long position.| Dassault Systemes vs. Salesforce | Dassault Systemes vs. SAP SE ADR | Dassault Systemes vs. ServiceNow | Dassault Systemes vs. Intuit Inc |
| Temenos Group vs. Salesforce | Temenos Group vs. SAP SE ADR | Temenos Group vs. ServiceNow | Temenos Group vs. Intuit Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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