Correlation Between Superior Plus and ANSYS

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

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

Diversification Opportunities for Superior Plus and ANSYS

-0.74

Correlation Coefficient

Superior Plus  ANSYS

Pay attention - limited upside

The 3 months correlation between Superior and ANSYS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and ANSYS go up and down completely randomly.

Pair Corralation between Superior Plus and ANSYS

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the ANSYS. In addition to that, Superior Plus is 1.11 times more volatile than ANSYS Inc. It trades about -0.02 of its total potential returns per unit of risk. ANSYS Inc is currently generating about 0.05 per unit of volatility. If you would invest  22,350  in ANSYS Inc on September 18, 2024 and sell it today you would earn a total of  10,300  from holding ANSYS Inc or generate 46.09% return on investment over 90 days.

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

Superior Plus Corp  vs.  ANSYS Inc

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ANSYS Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ANSYS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Plus and ANSYS

The main advantage of trading using opposite Superior Plus and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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 Superior Plus Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.