Correlation Between Autodesk and Dubber

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

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

Diversification Opportunities for Autodesk and Dubber

0.05

Correlation Coefficient

Autodesk  Dubber

Significant diversification

The 3 months correlation between Autodesk and Dubber is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Dubber Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dubber Limited 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 Dubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dubber Limited has no effect on the direction of Autodesk i.e., Autodesk and Dubber go up and down completely randomly.

Pair Corralation between Autodesk and Dubber

Given the investment horizon of 90 days Autodesk is expected to generate 0.39 times more return on investment than Dubber. However, Autodesk is 2.59 times less risky than Dubber. It trades about -0.14 of its potential returns per unit of risk. Dubber Limited is currently generating about -0.31 per unit of risk. If you would invest  31,939  in Autodesk on September 25, 2024 and sell it today you would lose (2,190) from holding Autodesk or give up 6.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Autodesk  vs.  Dubber Limited

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 fragile basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Dubber Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dubber Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Dubber reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autodesk and Dubber

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

The idea behind Autodesk and Dubber Limited 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.