Correlation Between MondayCom and ANSYS

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

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

Diversification Opportunities for MondayCom and ANSYS

-0.12

Correlation Coefficient

MondayCom  ANSYS

Good diversification

The 3 months correlation between MondayCom and ANSYS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and MondayCom 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 MondayCom 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 MondayCom i.e., MondayCom and ANSYS go up and down completely randomly.

Pair Corralation between MondayCom and ANSYS

Given the investment horizon of 90 days MondayCom is expected to generate 4.39 times more return on investment than ANSYS. However, MondayCom is 4.39 times more volatile than ANSYS Inc. It trades about 0.06 of its potential returns per unit of risk. ANSYS Inc is currently generating about -0.07 per unit of risk. If you would invest  23,522  in MondayCom on December 26, 2024 and sell it today you would earn a total of  2,929  from holding MondayCom or generate 12.45% return on investment over 90 days.

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

MondayCom  vs.  ANSYS Inc

MondayCom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, MondayCom showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with MondayCom and ANSYS

The main advantage of trading using opposite MondayCom and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MondayCom 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 MondayCom 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.