Correlation Between Autodesk and Loans4Less

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Can any of the company-specific risk be diversified away by investing in both Autodesk and Loans4Less 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 Loans4Less into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autodesk and Loans4LessCom, you can compare the effects of market volatilities on Autodesk and Loans4Less 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 Loans4Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autodesk and Loans4Less.

Diversification Opportunities for Autodesk and Loans4Less

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Autodesk and Loans4Less is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Loans4LessCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loans4LessCom 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 Loans4Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loans4LessCom has no effect on the direction of Autodesk i.e., Autodesk and Loans4Less go up and down completely randomly.

Pair Corralation between Autodesk and Loans4Less

Given the investment horizon of 90 days Autodesk is expected to generate 2.76 times less return on investment than Loans4Less. But when comparing it to its historical volatility, Autodesk is 4.84 times less risky than Loans4Less. It trades about 0.07 of its potential returns per unit of risk. Loans4LessCom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Loans4LessCom on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Loans4LessCom or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.73%
ValuesDaily Returns

Autodesk  vs.  Loans4LessCom

 Performance 
       Timeline  
Autodesk 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Loans4LessCom 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Loans4LessCom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting essential indicators, Loans4Less unveiled solid returns over the last few months and may actually be approaching a breakup point.

Autodesk and Loans4Less Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Autodesk and Loans4Less

The main advantage of trading using opposite Autodesk and Loans4Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autodesk position performs unexpectedly, Loans4Less 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 Loans4Less will offset losses from the drop in Loans4Less' long position.
The idea behind Autodesk and Loans4LessCom 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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