Correlation Between Digital Turbine and Autodesk

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

By analyzing existing cross correlation between Digital Turbine and Autodesk, you can compare the effects of market volatilities on Digital Turbine and Autodesk 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 Digital Turbine with a short position of Autodesk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Turbine and Autodesk.

Diversification Opportunities for Digital Turbine and Autodesk

0.29

Correlation Coefficient

Digital Turbine  Autodesk

Modest diversification

The 3 months correlation between Digital and Autodesk is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Digital Turbine and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Digital Turbine 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 Digital Turbine are associated (or correlated) with Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of Digital Turbine i.e., Digital Turbine and Autodesk go up and down completely randomly.

Pair Corralation between Digital Turbine and Autodesk

Given the investment horizon of 90 days Digital Turbine is expected to under-perform the Autodesk. In addition to that, Digital Turbine is 1.79 times more volatile than Autodesk. It trades about -0.43 of its total potential returns per unit of risk. Autodesk is currently generating about -0.46 per unit of volatility. If you would invest  26,157  in Autodesk on January 24, 2024 and sell it today you would lose (4,444) from holding Autodesk or give up 16.99% of portfolio value over 90 days.

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

Digital Turbine  vs.  Autodesk

Digital Turbine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Turbine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with Digital Turbine and Autodesk

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

The idea behind Digital Turbine and Autodesk 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 Anywhere module to track or share privately all of your investments from the convenience of any device.