Correlation Between ANSYS and Blackline

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

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

Diversification Opportunities for ANSYS and Blackline

0.74

Correlation Coefficient

ANSYS  Blackline

Poor diversification

The 3 months correlation between ANSYS and Blackline is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline 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 Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of ANSYS i.e., ANSYS and Blackline go up and down completely randomly.

Pair Corralation between ANSYS and Blackline

Given the investment horizon of 90 days ANSYS Inc is expected to generate 0.79 times more return on investment than Blackline. However, ANSYS Inc is 1.27 times less risky than Blackline. It trades about 0.04 of its potential returns per unit of risk. Blackline is currently generating about 0.03 per unit of risk. If you would invest  30,244  in ANSYS Inc on August 16, 2024 and sell it today you would earn a total of  4,166  from holding ANSYS Inc or generate 13.77% return on investment over 90 days.

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

ANSYS Inc  vs.  Blackline

ANSYS Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, ANSYS may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Blackline

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANSYS and Blackline

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

The idea behind ANSYS Inc and Blackline 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.