Correlation Between Autodesk and Canada Nickel
Can any of the company-specific risk be diversified away by investing in both Autodesk and Canada Nickel 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 Canada Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autodesk and Canada Nickel, you can compare the effects of market volatilities on Autodesk and Canada Nickel 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 Canada Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Canada Nickel.
Diversification Opportunities for Autodesk and Canada Nickel
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autodesk and Canada is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Canada Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Nickel 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 Canada Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Nickel has no effect on the direction of Autodesk i.e., Autodesk and Canada Nickel go up and down completely randomly.
Pair Corralation between Autodesk and Canada Nickel
Given the investment horizon of 90 days Autodesk is expected to generate 0.57 times more return on investment than Canada Nickel. However, Autodesk is 1.75 times less risky than Canada Nickel. It trades about 0.36 of its potential returns per unit of risk. Canada Nickel is currently generating about -0.13 per unit of risk. If you would invest 28,604 in Autodesk on August 26, 2024 and sell it today you would earn a total of 3,523 from holding Autodesk or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autodesk vs. Canada Nickel
Performance |
| Timeline |
| Autodesk |
| Canada Nickel |
Autodesk and Canada Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autodesk and Canada Nickel
The main advantage of trading using opposite Autodesk and Canada Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autodesk position performs unexpectedly, Canada Nickel 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 Canada Nickel will offset losses from the drop in Canada Nickel's long position.The idea behind Autodesk and Canada Nickel 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.| Canada Nickel vs. Nobel Resources Corp | Canada Nickel vs. Juggernaut Exploration | Canada Nickel vs. SPC Nickel Corp | Canada Nickel vs. Lotus Resources Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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