Correlation Between Autodesk and Dassault Systemes
Can any of the company-specific risk be diversified away by investing in both Autodesk and Dassault Systemes 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 Autodesk and Dassault Systemes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autodesk and Dassault Systemes SA, you can compare the effects of market volatilities on Autodesk and Dassault Systemes 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 Autodesk with a short position of Dassault Systemes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Dassault Systemes.
Diversification Opportunities for Autodesk and Dassault Systemes
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autodesk and Dassault is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Dassault Systemes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Systemes and Autodesk 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 Autodesk are associated (or correlated) with Dassault Systemes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Systemes has no effect on the direction of Autodesk i.e., Autodesk and Dassault Systemes go up and down completely randomly.
Pair Corralation between Autodesk and Dassault Systemes
Given the investment horizon of 90 days Autodesk is expected to generate 1.45 times more return on investment than Dassault Systemes. However, Autodesk is 1.45 times more volatile than Dassault Systemes SA. It trades about 0.05 of its potential returns per unit of risk. Dassault Systemes SA is currently generating about -0.18 per unit of risk. If you would invest 25,695 in Autodesk on December 29, 2023 and sell it today you would earn a total of 402.00 from holding Autodesk or generate 1.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Autodesk vs. Dassault Systemes SA
Performance |
Timeline |
Autodesk |
Dassault Systemes |
Autodesk and Dassault Systemes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Autodesk and Dassault Systemes
The main advantage of trading using opposite Autodesk and Dassault Systemes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autodesk position performs unexpectedly, Dassault Systemes 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 Dassault Systemes will offset losses from the drop in Dassault Systemes' long position.Autodesk vs. Kingsoft Cloud HoldingsLtd | Autodesk vs. C3 Ai Inc | Autodesk vs. Eventbrite Class A | Autodesk vs. Daily Journal Corp |
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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 the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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