Correlation Between Gitlab and ANSYS

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

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

Diversification Opportunities for Gitlab and ANSYS

0.92

Correlation Coefficient

Gitlab  ANSYS

Almost no diversification

The 3 months correlation between Gitlab and ANSYS is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Gitlab 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 Gitlab Inc 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 Gitlab i.e., Gitlab and ANSYS go up and down completely randomly.

Pair Corralation between Gitlab and ANSYS

Given the investment horizon of 90 days Gitlab Inc is expected to under-perform the ANSYS. In addition to that, Gitlab is 2.04 times more volatile than ANSYS Inc. It trades about -0.15 of its total potential returns per unit of risk. ANSYS Inc is currently generating about -0.1 per unit of volatility. If you would invest  35,000  in ANSYS Inc on September 23, 2024 and sell it today you would lose (1,162) from holding ANSYS Inc or give up 3.32% of portfolio value over 90 days.

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

Gitlab Inc  vs.  ANSYS Inc

Gitlab Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gitlab Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting essential indicators, Gitlab sustained solid returns over the last few months and may actually be approaching a breakup point.

ANSYS Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ANSYS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gitlab and ANSYS

The main advantage of trading using opposite Gitlab and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gitlab 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 Gitlab Inc 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.