Correlation Between Workday and ANSYS

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

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

Diversification Opportunities for Workday and ANSYS

0.41

Correlation Coefficient

Workday  ANSYS

Very weak diversification

The 3 months correlation between Workday and ANSYS is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Workday and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Workday 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 Workday 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 Workday i.e., Workday and ANSYS go up and down completely randomly.

Pair Corralation between Workday and ANSYS

Given the investment horizon of 90 days Workday is expected to generate 1.85 times more return on investment than ANSYS. However, Workday is 1.85 times more volatile than ANSYS Inc. It trades about -0.05 of its potential returns per unit of risk. ANSYS Inc is currently generating about -0.09 per unit of risk. If you would invest  26,200  in Workday on December 29, 2024 and sell it today you would lose (1,745) from holding Workday or give up 6.66% of portfolio value over 90 days.

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

Workday  vs.  ANSYS Inc

Workday

Risk-Adjusted Performance

Very Weak

Over the last 90 days Workday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Workday is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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 Workday and ANSYS

The main advantage of trading using opposite Workday and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workday 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 Workday 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.