Correlation Between ANSYS and HubSpot

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

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

Diversification Opportunities for ANSYS and HubSpot

0.95

Correlation Coefficient

ANSYS  HubSpot

Almost no diversification

The 3 months correlation between ANSYS and HubSpot is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and ANSYS 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 ANSYS Inc are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of ANSYS i.e., ANSYS and HubSpot go up and down completely randomly.

Pair Corralation between ANSYS and HubSpot

Assuming the 90 days horizon ANSYS Inc is expected to under-perform the HubSpot. But the stock apears to be less risky and, when comparing its historical volatility, ANSYS Inc is 1.37 times less risky than HubSpot. The stock trades about -0.22 of its potential returns per unit of risk. The HubSpot is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  69,880  in HubSpot on September 23, 2024 and sell it today you would lose (2,540) from holding HubSpot or give up 3.63% of portfolio value over 90 days.

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

ANSYS Inc  vs.  HubSpot

ANSYS Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ANSYS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HubSpot

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HubSpot reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANSYS and HubSpot

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

The idea behind ANSYS Inc and HubSpot 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.