Correlation Between Autodesk and Exela Technologies

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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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Autodesk  vs.  Exela Technologies

 Performance 
       Timeline  
Autodesk 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Exela Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Exela Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Exela Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind Autodesk and Exela Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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