Correlation Between Open Text and Synopsys

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

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

Diversification Opportunities for Open Text and Synopsys

-0.89

Correlation Coefficient

Open Text  Synopsys

Pay attention - limited upside

The 3 months correlation between Open and Synopsys is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Synopsys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopsys and Open Text 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 Open Text Corp are associated (or correlated) with Synopsys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopsys has no effect on the direction of Open Text i.e., Open Text and Synopsys go up and down completely randomly.

Pair Corralation between Open Text and Synopsys

Assuming the 90 days trading horizon Open Text Corp is expected to generate 0.38 times more return on investment than Synopsys. However, Open Text Corp is 2.65 times less risky than Synopsys. It trades about 0.25 of its potential returns per unit of risk. Synopsys is currently generating about -0.07 per unit of risk. If you would invest  3,914  in Open Text Corp on August 2, 2025 and sell it today you would earn a total of  1,382  from holding Open Text Corp or generate 35.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Open Text Corp  vs.  Synopsys

Open Text Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Open Text Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Open Text displayed solid returns over the last few months and may actually be approaching a breakup point.

Synopsys

Risk-Adjusted Performance

Weakest

Over the last 90 days Synopsys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Open Text and Synopsys

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

The idea behind Open Text Corp and Synopsys 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.