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

0.19

Correlation Coefficient

Dassault Systemes  Worldline

Average diversification

The 3 months correlation between Dassault and Worldline is 0.19. 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 SE is expected to generate 0.4 times more return on investment than Worldline. However, Dassault Systemes SE is 2.51 times less risky than Worldline. It trades about -0.05 of its potential returns per unit of risk. Worldline SA is currently generating about -0.06 per unit of risk. If you would invest  3,472  in Dassault Systemes SE on September 3, 2024 and sell it today you would lose (207.00) from holding Dassault Systemes SE or give up 5.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dassault Systemes SE  vs.  Worldline 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 current stock price disturbance, may contribute to short-term losses for the investors.

Worldline SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worldline SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

The idea behind Dassault Systemes SE and Worldline 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.