Correlation Between ANSYS and Shopify

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

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

Diversification Opportunities for ANSYS and Shopify

0.53

Correlation Coefficient

ANSYS  Shopify

Very weak diversification

The 3 months correlation between ANSYS and Shopify is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and Shopify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shopify 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 Shopify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shopify has no effect on the direction of ANSYS i.e., ANSYS and Shopify go up and down completely randomly.

Pair Corralation between ANSYS and Shopify

Given the investment horizon of 90 days ANSYS Inc is expected to generate 0.31 times more return on investment than Shopify. However, ANSYS Inc is 3.19 times less risky than Shopify. It trades about -0.09 of its potential returns per unit of risk. Shopify is currently generating about -0.03 per unit of risk. If you would invest  33,792  in ANSYS Inc on December 29, 2024 and sell it today you would lose (2,103) from holding ANSYS Inc or give up 6.22% of portfolio value over 90 days.

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

ANSYS Inc  vs.  Shopify

ANSYS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ANSYS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Shopify

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shopify has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with ANSYS and Shopify

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

The idea behind ANSYS Inc and Shopify 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 Transaction History module to view history of all your transactions and understand their impact on performance.