Correlation Between Autodesk and Ceridian HCM

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

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

Diversification Opportunities for Autodesk and Ceridian HCM

0.36

Correlation Coefficient

Autodesk  Ceridian HCM

Weak diversification

The 3 months correlation between Autodesk and Ceridian is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Ceridian HCM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceridian HCM Holding 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 Ceridian HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceridian HCM Holding has no effect on the direction of Autodesk i.e., Autodesk and Ceridian HCM go up and down completely randomly.

Pair Corralation between Autodesk and Ceridian HCM

If you would invest  24,583  in Autodesk on September 27, 2024 and sell it today you would earn a total of  5,540  from holding Autodesk or generate 22.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.8%
Values	Daily Returns

Autodesk  vs.  Ceridian HCM Holding

Autodesk

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ceridian HCM Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceridian HCM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ceridian HCM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Autodesk and Ceridian HCM

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

The idea behind Autodesk and Ceridian HCM Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.