Correlation Between Mangels Industrial and Autodesk

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

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

Diversification Opportunities for Mangels Industrial and Autodesk

0.45

Correlation Coefficient

Mangels Industrial  Autodesk

Very weak diversification

The 3 months correlation between Mangels and Autodesk is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Mangels Industrial 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 Mangels Industrial SA 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 Mangels Industrial i.e., Mangels Industrial and Autodesk go up and down completely randomly.

Pair Corralation between Mangels Industrial and Autodesk

Assuming the 90 days trading horizon Mangels Industrial SA is expected to generate 2.33 times more return on investment than Autodesk. However, Mangels Industrial is 2.33 times more volatile than Autodesk. It trades about 0.0 of its potential returns per unit of risk. Autodesk is currently generating about -0.14 per unit of risk. If you would invest  697.00  in Mangels Industrial SA on December 24, 2024 and sell it today you would lose (48.00) from holding Mangels Industrial SA or give up 6.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Mangels Industrial SA  vs.  Autodesk

Mangels Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mangels Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Autodesk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Autodesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mangels Industrial and Autodesk

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

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.