Correlation Between Elevance Health, and Autodesk

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

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

Diversification Opportunities for Elevance Health, and Autodesk

-0.62

Correlation Coefficient

Elevance Health,  Autodesk

Excellent diversification

The 3 months correlation between Elevance and Autodesk is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health, and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Elevance Health, 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 Elevance Health, 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 Elevance Health, i.e., Elevance Health, and Autodesk go up and down completely randomly.

Pair Corralation between Elevance Health, and Autodesk

Assuming the 90 days trading horizon Elevance Health, is expected to generate 4.45 times less return on investment than Autodesk. But when comparing it to its historical volatility, Elevance Health, is 1.69 times less risky than Autodesk. It trades about 0.03 of its potential returns per unit of risk. Autodesk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  40,754  in Autodesk on October 23, 2024 and sell it today you would earn a total of  3,363  from holding Autodesk or generate 8.25% return on investment over 90 days.

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

Elevance Health,  vs.  Autodesk

Elevance Health,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevance Health, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Elevance Health, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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

Pair Trading with Elevance Health, and Autodesk

The main advantage of trading using opposite Elevance Health, and Autodesk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health, 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 Elevance Health, 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.