Correlation Between Dassault Systèmes and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both Dassault Systèmes and Aedas Homes 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 Systèmes and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dassault Systmes SE and Aedas Homes SA, you can compare the effects of market volatilities on Dassault Systèmes and Aedas Homes 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 Systèmes with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systèmes and Aedas Homes.
Diversification Opportunities for Dassault Systèmes and Aedas Homes
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dassault and Aedas is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systmes SE and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and Dassault Systèmes 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 Systmes SE are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of Dassault Systèmes i.e., Dassault Systèmes and Aedas Homes go up and down completely randomly.
Pair Corralation between Dassault Systèmes and Aedas Homes
Assuming the 90 days horizon Dassault Systmes SE is expected to under-perform the Aedas Homes. In addition to that, Dassault Systèmes is 1.01 times more volatile than Aedas Homes SA. It trades about 0.0 of its total potential returns per unit of risk. Aedas Homes SA is currently generating about 0.12 per unit of volatility. If you would invest 930.00 in Aedas Homes SA on September 4, 2024 and sell it today you would earn a total of 1,520 from holding Aedas Homes SA or generate 163.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dassault Systmes SE vs. Aedas Homes SA
Performance |
| Timeline |
| Dassault Systèmes |
| Aedas Homes SA |
Dassault Systèmes and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dassault Systèmes and Aedas Homes
The main advantage of trading using opposite Dassault Systèmes and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systèmes position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| Dassault Systèmes vs. Caseys General Stores | Dassault Systèmes vs. Universal Display | Dassault Systèmes vs. COSTCO WHOLESALE CDR | Dassault Systèmes vs. QURATE RETAIL INC |
| Aedas Homes vs. Sekisui Chemical Co | Aedas Homes vs. BARRATT DEVEL UNSPADR2 | Aedas Homes vs. Superior Plus Corp | Aedas Homes vs. NMI Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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