Correlation Between Worldline and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both Worldline and Dassault Systemes 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 Worldline and Dassault Systemes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldline SA and Dassault Systemes SE, you can compare the effects of market volatilities on Worldline and Dassault Systemes 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 Worldline with a short position of Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldline and Dassault Systemes.
Diversification Opportunities for Worldline and Dassault Systemes
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Worldline and Dassault is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Worldline SA and Dassault Systemes SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes and Worldline 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 Worldline SA are associated (or correlated) with Dassault Systemes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systemes has no effect on the direction of Worldline i.e., Worldline and Dassault Systemes go up and down completely randomly.
Pair Corralation between Worldline and Dassault Systemes
Assuming the 90 days trading horizon Worldline is expected to generate 1.55 times less return on investment than Dassault Systemes. In addition to that, Worldline is 2.01 times more volatile than Dassault Systemes SE. It trades about 0.04 of its total potential returns per unit of risk. Dassault Systemes SE is currently generating about 0.12 per unit of volatility. If you would invest 3,181 in Dassault Systemes SE on August 27, 2024 and sell it today you would earn a total of 118.00 from holding Dassault Systemes SE or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldline SA vs. Dassault Systemes SE
Performance |
| Timeline |
| Worldline SA |
| Dassault Systemes |
Worldline and Dassault Systemes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldline and Dassault Systemes
The main advantage of trading using opposite Worldline and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldline position performs unexpectedly, Dassault Systemes 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 Systemes will offset losses from the drop in Dassault Systemes' long position.| Worldline vs. Sartorius Stedim Biotech | Worldline vs. Lectra SA | Worldline vs. Teleperformance SE | Worldline vs. Trigano SA |
| Dassault Systemes vs. Thales SA | Dassault Systemes vs. Safran SA | Dassault Systemes vs. Air Liquide SA | Dassault Systemes 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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