Correlation Between Autodesk and Futuris

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

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

Diversification Opportunities for Autodesk and Futuris

-0.37

Correlation Coefficient

Autodesk  Futuris

Very good diversification

The 3 months correlation between Autodesk and Futuris is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Autodesk and Futuris Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuris Company 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 Futuris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuris Company has no effect on the direction of Autodesk i.e., Autodesk and Futuris go up and down completely randomly.

Pair Corralation between Autodesk and Futuris

Given the investment horizon of 90 days Autodesk is expected to generate 3.41 times less return on investment than Futuris. But when comparing it to its historical volatility, Autodesk is 6.66 times less risky than Futuris. It trades about 0.1 of its potential returns per unit of risk. Futuris Company is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.32  in Futuris Company on March 16, 2025 and sell it today you would lose (0.11) from holding Futuris Company or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Autodesk  vs.  Futuris Company

Autodesk

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Autodesk disclosed solid returns over the last few months and may actually be approaching a breakup point.

Futuris Company

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Futuris Company are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Futuris unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autodesk and Futuris

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

The idea behind Autodesk and Futuris Company 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.