Correlation Between HEALTHSTREAM (HL5SG) and Dassault Systèmes
Can any of the company-specific risk be diversified away by investing in both HEALTHSTREAM (HL5SG) and Dassault Systèmes 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 HEALTHSTREAM (HL5SG) and Dassault Systèmes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHSTREAM and Dassault Systmes SE, you can compare the effects of market volatilities on HEALTHSTREAM (HL5SG) and Dassault Systèmes 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 HEALTHSTREAM (HL5SG) with a short position of Dassault Systèmes. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHSTREAM (HL5SG) and Dassault Systèmes.
Diversification Opportunities for HEALTHSTREAM (HL5SG) and Dassault Systèmes
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEALTHSTREAM and Dassault is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHSTREAM and Dassault Systmes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systèmes and HEALTHSTREAM (HL5SG) 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 HEALTHSTREAM are associated (or correlated) with Dassault Systèmes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systèmes has no effect on the direction of HEALTHSTREAM (HL5SG) i.e., HEALTHSTREAM (HL5SG) and Dassault Systèmes go up and down completely randomly.
Pair Corralation between HEALTHSTREAM (HL5SG) and Dassault Systèmes
Assuming the 90 days trading horizon HEALTHSTREAM (HL5SG) is expected to generate 1.25 times less return on investment than Dassault Systèmes. In addition to that, HEALTHSTREAM (HL5SG) is 1.01 times more volatile than Dassault Systmes SE. It trades about 0.11 of its total potential returns per unit of risk. Dassault Systmes SE is currently generating about 0.14 per unit of volatility. If you would invest 3,300 in Dassault Systmes SE on October 23, 2024 and sell it today you would earn a total of 120.00 from holding Dassault Systmes SE or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
HEALTHSTREAM vs. Dassault Systmes SE
Performance |
| Timeline |
| HEALTHSTREAM (HL5SG) |
| Dassault Systèmes |
HEALTHSTREAM (HL5SG) and Dassault Systèmes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHSTREAM (HL5SG) and Dassault Systèmes
The main advantage of trading using opposite HEALTHSTREAM (HL5SG) and Dassault Systèmes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHSTREAM (HL5SG) position performs unexpectedly, Dassault Systèmes 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 Systèmes will offset losses from the drop in Dassault Systèmes' long position.| HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc | HEALTHSTREAM (HL5SG) vs. Apple Inc |
| Dassault Systèmes vs. NIGHTINGALE HEALTH EO | Dassault Systèmes vs. RCI Hospitality Holdings | Dassault Systèmes vs. ELMOS SEMICONDUCTOR | Dassault Systèmes vs. HEALTHSTREAM |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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