Correlation Between Autodesk and Exela Technologies
Can any of the company-specific risk be diversified away by investing in both Autodesk and Exela Technologies 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 Exela Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autodesk and Exela Technologies, you can compare the effects of market volatilities on Autodesk and Exela Technologies 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 Exela Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Exela Technologies.
Diversification Opportunities for Autodesk and Exela Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autodesk and Exela is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Exela Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exela Technologies 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 Exela Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exela Technologies has no effect on the direction of Autodesk i.e., Autodesk and Exela Technologies go up and down completely randomly.
Pair Corralation between Autodesk and Exela Technologies
Given the investment horizon of 90 days Autodesk is expected to generate 18.51 times less return on investment than Exela Technologies. But when comparing it to its historical volatility, Autodesk is 4.73 times less risky than Exela Technologies. It trades about 0.05 of its potential returns per unit of risk. Exela Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 232.00 in Exela Technologies on December 29, 2023 and sell it today you would earn a total of 74.00 from holding Exela Technologies or generate 31.9% 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. Exela Technologies
Performance |
Timeline |
Autodesk |
Exela Technologies |
Autodesk and Exela Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Autodesk and Exela Technologies
The main advantage of trading using opposite Autodesk and Exela Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autodesk position performs unexpectedly, Exela Technologies 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 Exela Technologies will offset losses from the drop in Exela Technologies' 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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