Correlation Between Blackbaud and ANSYS

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

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

Diversification Opportunities for Blackbaud and ANSYS

-0.61

Correlation Coefficient

Blackbaud  ANSYS

Excellent diversification

The 3 months correlation between Blackbaud and ANSYS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blackbaud and ANSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANSYS Inc and Blackbaud 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 Blackbaud 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 Blackbaud i.e., Blackbaud and ANSYS go up and down completely randomly.

Pair Corralation between Blackbaud and ANSYS

Given the investment horizon of 90 days Blackbaud is expected to generate 1.19 times more return on investment than ANSYS. However, Blackbaud is 1.19 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 0.01 per unit of risk. If you would invest  7,918  in Blackbaud on February 23, 2024 and sell it today you would earn a total of  46.00  from holding Blackbaud or generate 0.58% return on investment over 90 days.

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

Blackbaud  vs.  ANSYS Inc

Blackbaud

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackbaud are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward-looking signals, Blackbaud sustained solid returns over the last few months and may actually be approaching a breakup point.

ANSYS Inc

Risk-Adjusted Performance

0 of 100

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackbaud and ANSYS

The main advantage of trading using opposite Blackbaud and ANSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackbaud 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 Blackbaud 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.