Correlation Between Autodesk and Kinetik Holdings

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

By analyzing existing cross correlation between Autodesk and Kinetik Holdings, you can compare the effects of market volatilities on Autodesk and Kinetik Holdings 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 Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Kinetik Holdings.

Diversification Opportunities for Autodesk and Kinetik Holdings

-0.4

Correlation Coefficient

Autodesk  Kinetik Holdings

Very good diversification

The 3 months correlation between Autodesk and Kinetik is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings 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 Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Autodesk i.e., Autodesk and Kinetik Holdings go up and down completely randomly.

Pair Corralation between Autodesk and Kinetik Holdings

Given the investment horizon of 90 days Autodesk is expected to generate 1.74 times less return on investment than Kinetik Holdings. In addition to that, Autodesk is 1.05 times more volatile than Kinetik Holdings. It trades about 0.02 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.03 per unit of volatility. If you would invest  3,123  in Kinetik Holdings on January 24, 2024 and sell it today you would earn a total of  779.00  from holding Kinetik Holdings or generate 24.94% return on investment over 90 days.

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

Autodesk  vs.  Kinetik Holdings

Autodesk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autodesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Kinetik Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autodesk and Kinetik Holdings

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

The idea behind Autodesk and Kinetik Holdings 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.