Correlation Between Autodesk and Tradegate

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

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

Diversification Opportunities for Autodesk and Tradegate

0.34

Correlation Coefficient

Autodesk  Tradegate

Weak diversification

The 3 months correlation between Autodesk and Tradegate is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Autodesk i.e., Autodesk and Tradegate go up and down completely randomly.

Pair Corralation between Autodesk and Tradegate

Assuming the 90 days horizon Autodesk is expected to generate 2.54 times more return on investment than Tradegate. However, Autodesk is 2.54 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.09 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.14 per unit of risk. If you would invest  26,575  in Autodesk on October 26, 2024 and sell it today you would earn a total of  2,400  from holding Autodesk or generate 9.03% return on investment over 90 days.

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

Autodesk  vs.  Tradegate AG Wertpapierhandels

Autodesk

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tradegate AG Wertpap

Risk-Adjusted Performance

10 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tradegate AG Wertpapierhandelsbank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Tradegate may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Autodesk and Tradegate

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

The idea behind Autodesk and Tradegate AG Wertpapierhandelsbank 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.