Correlation Between ANSYS and Synopsys

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

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

Diversification Opportunities for ANSYS and Synopsys

0.89

Correlation Coefficient

ANSYS  Synopsys

Very poor diversification

The 3 months correlation between ANSYS and Synopsys is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and Synopsys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopsys 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 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 ANSYS i.e., ANSYS and Synopsys go up and down completely randomly.

Pair Corralation between ANSYS and Synopsys

Assuming the 90 days horizon ANSYS is expected to generate 1.16 times less return on investment than Synopsys. But when comparing it to its historical volatility, ANSYS Inc is 1.61 times less risky than Synopsys. It trades about 0.24 of its potential returns per unit of risk. Synopsys is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  38,595  in Synopsys on April 23, 2025 and sell it today you would earn a total of  11,265  from holding Synopsys or generate 29.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

ANSYS Inc  vs.  Synopsys

ANSYS Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ANSYS reported solid returns over the last few months and may actually be approaching a breakup point.

Synopsys

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Synopsys are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Synopsys reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANSYS and Synopsys

The main advantage of trading using opposite ANSYS and Synopsys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANSYS 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 ANSYS Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.