Correlation Between Blackline and ANSYS

Can any of the company-specific risk be diversified away by investing in both Blackline and ANSYS 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 Blackline and ANSYS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackline and ANSYS Inc, you can compare the effects of market volatilities on Blackline and ANSYS 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 Blackline with a short position of ANSYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackline and ANSYS.

Diversification Opportunities for Blackline and ANSYS

0.86

Correlation Coefficient

Blackline  ANSYS

Very poor diversification

The 3 months correlation between Blackline and ANSYS is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Blackline and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Blackline 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 Blackline are associated (or correlated) with ANSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANSYS Inc has no effect on the direction of Blackline i.e., Blackline and ANSYS go up and down completely randomly.

Pair Corralation between Blackline and ANSYS

Allowing for the 90-day total investment horizon Blackline is expected to generate 1.12 times more return on investment than ANSYS. However, Blackline is 1.12 times more volatile than ANSYS Inc. It trades about 0.23 of its potential returns per unit of risk. ANSYS Inc is currently generating about 0.14 per unit of risk. If you would invest  4,851  in Blackline on September 2, 2024 and sell it today you would earn a total of  1,350  from holding Blackline or generate 27.83% return on investment over 90 days.

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

Blackline  vs.  ANSYS Inc

Blackline

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

ANSYS Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, ANSYS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackline and ANSYS

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

The idea behind Blackline and ANSYS Inc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.