Correlation Between Manhattan Associates and American Software
Can any of the company-specific risk be diversified away by investing in both Manhattan Associates and American Software 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 Manhattan Associates and American Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Associates and American Software, you can compare the effects of market volatilities on Manhattan Associates and American Software 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 Manhattan Associates with a short position of American Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Associates and American Software.
Diversification Opportunities for Manhattan Associates and American Software
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Manhattan and American is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and American Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Software and Manhattan Associates 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 Manhattan Associates are associated (or correlated) with American Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Software has no effect on the direction of Manhattan Associates i.e., Manhattan Associates and American Software go up and down completely randomly.
Pair Corralation between Manhattan Associates and American Software
Given the investment horizon of 90 days Manhattan Associates is expected to generate 1.7 times more return on investment than American Software. However, Manhattan Associates is 1.7 times more volatile than American Software. It trades about 0.11 of its potential returns per unit of risk. American Software is currently generating about -0.15 per unit of risk. If you would invest 25,639 in Manhattan Associates on August 31, 2024 and sell it today you would earn a total of 3,129 from holding Manhattan Associates or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 36.51% |
| Values | Daily Returns |
Manhattan Associates vs. American Software
Performance |
| Timeline |
| Manhattan Associates |
| American Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Manhattan Associates and American Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan Associates and American Software
The main advantage of trading using opposite Manhattan Associates and American Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Associates position performs unexpectedly, American Software 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 American Software will offset losses from the drop in American Software's long position.| Manhattan Associates vs. Blackbaud | Manhattan Associates vs. Bentley Systems | Manhattan Associates vs. Paylocity Holdng | Manhattan Associates vs. ANSYS Inc |
| American Software vs. Paycor HCM | American Software vs. Appfolio | American Software vs. Agilysys | American Software vs. Meridianlink |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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