Correlation Between Dassault Systèmes and ANSYS

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

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

Diversification Opportunities for Dassault Systèmes and ANSYS

-0.66

Correlation Coefficient

Dassault Systèmes  ANSYS

Excellent diversification

The 3 months correlation between Dassault and ANSYS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systmes SE and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Dassault Systèmes 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 Systmes SE 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 Systèmes i.e., Dassault Systèmes and ANSYS go up and down completely randomly.

Pair Corralation between Dassault Systèmes and ANSYS

Assuming the 90 days horizon Dassault Systmes SE is expected to under-perform the ANSYS. In addition to that, Dassault Systèmes is 1.11 times more volatile than ANSYS Inc. It trades about -0.04 of its total potential returns per unit of risk. ANSYS Inc is currently generating about 0.2 per unit of volatility. If you would invest  27,640  in ANSYS Inc on September 4, 2024 and sell it today you would earn a total of  5,410  from holding ANSYS Inc or generate 19.57% return on investment over 90 days.

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

Dassault Systmes SE  vs.  ANSYS Inc

Dassault Systèmes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dassault Systmes SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dassault Systèmes is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ANSYS Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ANSYS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dassault Systèmes and ANSYS

The main advantage of trading using opposite Dassault Systèmes and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systèmes 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 Systmes SE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..