Correlation Between Dassault Systemes and ANSYS

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

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

Diversification Opportunities for Dassault Systemes and ANSYS

-0.46

Correlation Coefficient

Dassault Systemes  ANSYS

Very good diversification

The 3 months correlation between Dassault and ANSYS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SA and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc 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 SA 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 Dassault Systemes i.e., Dassault Systemes and ANSYS go up and down completely randomly.

Pair Corralation between Dassault Systemes and ANSYS

If you would invest  32,229  in ANSYS Inc on September 19, 2024 and sell it today you would earn a total of  2,078  from holding ANSYS Inc or generate 6.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Dassault Systemes SA  vs.  ANSYS Inc

Dassault Systemes

Risk-Adjusted Performance

0 of 100

Very Weak

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

ANSYS Inc

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, ANSYS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dassault Systemes and ANSYS

The main advantage of trading using opposite Dassault Systemes and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes 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 Dassault Systemes SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.