Correlation Between ANSYS and Zurich Insurance

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Can any of the company-specific risk be diversified away by investing in both ANSYS and Zurich Insurance 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 Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANSYS Inc and Zurich Insurance Group, you can compare the effects of market volatilities on ANSYS and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANSYS and Zurich Insurance.

Diversification Opportunities for ANSYS and Zurich Insurance

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between ANSYS and Zurich is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of ANSYS i.e., ANSYS and Zurich Insurance go up and down completely randomly.

Pair Corralation between ANSYS and Zurich Insurance

Given the investment horizon of 90 days ANSYS Inc is expected to under-perform the Zurich Insurance. In addition to that, ANSYS is 1.87 times more volatile than Zurich Insurance Group. It trades about -0.02 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.05 per unit of volatility. If you would invest  3,697  in Zurich Insurance Group on September 10, 2022 and sell it today you would earn a total of  1,119  from holding Zurich Insurance Group or generate 30.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

ANSYS Inc  vs.  Zurich Insurance Group

 Performance (%) 
       Timeline  
ANSYS Inc 
ANSYS Performance
0 of 100
Over the last 90 days ANSYS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ANSYS is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ANSYS Price Channel

Zurich Insurance 
Zurich Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Zurich Insurance Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Zurich Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Zurich Price Channel

ANSYS and Zurich Insurance Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ANSYS and Zurich Insurance

The main advantage of trading using opposite ANSYS and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANSYS position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.
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The idea behind ANSYS Inc and Zurich Insurance Group 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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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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