Correlation Between Dassault Systemes and Biomerieux

Can any of the company-specific risk be diversified away by investing in both Dassault Systemes and Biomerieux 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 Biomerieux 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 Biomerieux SA, you can compare the effects of market volatilities on Dassault Systemes and Biomerieux 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 Biomerieux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systemes and Biomerieux.

Diversification Opportunities for Dassault Systemes and Biomerieux

0.46

Correlation Coefficient

Dassault Systemes  Biomerieux

Very weak diversification

The 3 months correlation between Dassault and Biomerieux is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux 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 Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of Dassault Systemes i.e., Dassault Systemes and Biomerieux go up and down completely randomly.

Pair Corralation between Dassault Systemes and Biomerieux

Assuming the 90 days trading horizon Dassault Systemes SE is expected to under-perform the Biomerieux. In addition to that, Dassault Systemes is 1.33 times more volatile than Biomerieux SA. It trades about -0.06 of its total potential returns per unit of risk. Biomerieux SA is currently generating about -0.07 per unit of volatility. If you would invest  10,790  in Biomerieux SA on September 24, 2024 and sell it today you would lose (570.00) from holding Biomerieux SA or give up 5.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Dassault Systemes SE  vs.  Biomerieux SA

Dassault Systemes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dassault Systemes SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dassault Systemes is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Biomerieux SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomerieux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Biomerieux is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dassault Systemes and Biomerieux

The main advantage of trading using opposite Dassault Systemes and Biomerieux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes position performs unexpectedly, Biomerieux 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 Biomerieux will offset losses from the drop in Biomerieux's long position.

The idea behind Dassault Systemes SE and Biomerieux SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.