Correlation Between Descartes Systems and Open Text

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

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

Diversification Opportunities for Descartes Systems and Open Text

-0.12

Correlation Coefficient

Descartes Systems  Open Text

Good diversification

The 3 months correlation between Descartes and Open is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Descartes Systems Group and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp and Descartes Systems 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 Descartes Systems Group are associated (or correlated) with Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Descartes Systems i.e., Descartes Systems and Open Text go up and down completely randomly.

Pair Corralation between Descartes Systems and Open Text

Assuming the 90 days trading horizon Descartes Systems Group is expected to under-perform the Open Text. In addition to that, Descartes Systems is 1.34 times more volatile than Open Text Corp. It trades about 0.0 of its total potential returns per unit of risk. Open Text Corp is currently generating about 0.11 per unit of volatility. If you would invest  3,706  in Open Text Corp on April 25, 2025 and sell it today you would earn a total of  400.00  from holding Open Text Corp or generate 10.79% return on investment over 90 days.

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

Descartes Systems Group  vs.  Open Text Corp

Descartes Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Descartes Systems Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Descartes Systems is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Open Text Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Open Text Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Open Text may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Descartes Systems and Open Text

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

The idea behind Descartes Systems Group and Open Text Corp 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.