Correlation Between Dassault Systemes and Autodesk

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

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

Diversification Opportunities for Dassault Systemes and Autodesk

0.5

Correlation Coefficient

Dassault Systemes  Autodesk

Very weak diversification

The 3 months correlation between Dassault and Autodesk is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Systemes SE and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Dassault Systemes 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 Dassault Systemes SE 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 Dassault Systemes i.e., Dassault Systemes and Autodesk go up and down completely randomly.

Pair Corralation between Dassault Systemes and Autodesk

Assuming the 90 days horizon Dassault Systemes is expected to generate 4.27 times less return on investment than Autodesk. In addition to that, Dassault Systemes is 1.04 times more volatile than Autodesk. It trades about 0.0 of its total potential returns per unit of risk. Autodesk is currently generating about 0.02 per unit of volatility. If you would invest  19,839  in Autodesk on January 25, 2024 and sell it today you would earn a total of  1,954  from holding Autodesk or generate 9.85% return on investment over 90 days.

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

Dassault Systemes SE  vs.  Autodesk

Dassault Systemes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dassault Systemes SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Dassault Systemes and Autodesk

The main advantage of trading using opposite Dassault Systemes and Autodesk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Systemes 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 Dassault Systemes SE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.