Correlation Between Autodesk and Intuit

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

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

Diversification Opportunities for Autodesk and Intuit

0.81

Correlation Coefficient

Autodesk  Intuit

Very poor diversification

The 3 months correlation between Autodesk and Intuit is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Intuit Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuit Inc 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 Intuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuit Inc has no effect on the direction of Autodesk i.e., Autodesk and Intuit go up and down completely randomly.

Pair Corralation between Autodesk and Intuit

Assuming the 90 days horizon Autodesk is expected to under-perform the Intuit. In addition to that, Autodesk is 1.46 times more volatile than Intuit Inc. It trades about -0.16 of its total potential returns per unit of risk. Intuit Inc is currently generating about 0.06 per unit of volatility. If you would invest  61,310  in Intuit Inc on September 23, 2024 and sell it today you would earn a total of  1,050  from holding Intuit Inc or generate 1.71% return on investment over 90 days.

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

Autodesk  vs.  Intuit Inc

Autodesk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Autodesk reported solid returns over the last few months and may actually be approaching a breakup point.

Intuit Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Intuit may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Autodesk and Intuit

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

The idea behind Autodesk and Intuit Inc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.