Correlation Between Dassault Systmes and ANSYS

Can any of the company-specific risk be diversified away by investing in both Dassault Systmes 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 Systmes 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 Systmes 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 Systmes with a short position of ANSYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dassault Systmes and ANSYS.

Diversification Opportunities for Dassault Systmes and ANSYS

-0.41

Correlation Coefficient

Dassault Systmes  ANSYS

Very good diversification

The 3 months correlation between Dassault and ANSYS is -0.41. 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 Systmes 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 Systmes i.e., Dassault Systmes and ANSYS go up and down completely randomly.

Pair Corralation between Dassault Systmes and ANSYS

Assuming the 90 days horizon Dassault Systmes SE is expected to generate 1.73 times more return on investment than ANSYS. However, Dassault Systmes is 1.73 times more volatile than ANSYS Inc. It trades about -0.03 of its potential returns per unit of risk. ANSYS Inc is currently generating about -0.22 per unit of risk. If you would invest  3,220  in Dassault Systmes SE on September 23, 2024 and sell it today you would lose (40.00) from holding Dassault Systmes SE or give up 1.24% of portfolio value over 90 days.

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

Dassault Systmes SE  vs.  ANSYS Inc

Dassault Systmes

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 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

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.

Pair Trading with Dassault Systmes and ANSYS

The main advantage of trading using opposite Dassault Systmes and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systmes 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.