Correlation Between Dassault Systemes and Worldline
Can any of the company-specific risk be diversified away by investing in both Dassault Systemes and Worldline 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 Worldline 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 Worldline SA, you can compare the effects of market volatilities on Dassault Systemes and Worldline 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 Worldline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systemes and Worldline.
Diversification Opportunities for Dassault Systemes and Worldline
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dassault and Worldline is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Worldline SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldline SA 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 Worldline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldline SA has no effect on the direction of Dassault Systemes i.e., Dassault Systemes and Worldline go up and down completely randomly.
Pair Corralation between Dassault Systemes and Worldline
Assuming the 90 days trading horizon Dassault Systemes is expected to generate 1.15 times less return on investment than Worldline. But when comparing it to its historical volatility, Dassault Systemes SE is 2.65 times less risky than Worldline. It trades about 0.08 of its potential returns per unit of risk. Worldline SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 791.00 in Worldline SA on November 3, 2024 and sell it today you would earn a total of 61.00 from holding Worldline SA or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dassault Systemes SE vs. Worldline SA
Performance |
| Timeline |
| Dassault Systemes |
| Worldline SA |
Dassault Systemes and Worldline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dassault Systemes and Worldline
The main advantage of trading using opposite Dassault Systemes and Worldline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes position performs unexpectedly, Worldline 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 Worldline will offset losses from the drop in Worldline's long position.| Dassault Systemes vs. Thales SA | Dassault Systemes vs. Safran SA | Dassault Systemes vs. Air Liquide SA | Dassault Systemes vs. Capgemini SE |
| Worldline vs. Atos SE | Worldline vs. Teleperformance SE | Worldline vs. Dassault Systemes SE | Worldline 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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