Correlation Between Dassault Systemes and Capgemini

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

Diversification Opportunities for Dassault Systemes and Capgemini

0.0

Correlation Coefficient

Dassault Systemes  Capgemini

Pay attention - limited upside

The 3 months correlation between Dassault and Capgemini is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE 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 Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of Dassault Systemes i.e., Dassault Systemes and Capgemini go up and down completely randomly.

Pair Corralation between Dassault Systemes and Capgemini

If you would invest  0.00  in Capgemini SE on March 13, 2024 and sell it today you would earn a total of  0.00  from holding Capgemini SE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dassault Systemes SE  vs.  Capgemini SE

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.

Capgemini SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capgemini SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Capgemini 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 Capgemini

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

The idea behind Dassault Systemes SE and Capgemini SE 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.