Correlation Between Intuit and Automatic Data

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

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

Diversification Opportunities for Intuit and Automatic Data

-0.09

Correlation Coefficient

Intuit  Automatic Data

Good diversification

The 3 months correlation between Intuit and Automatic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and Intuit 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 Intuit Inc are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Intuit i.e., Intuit and Automatic Data go up and down completely randomly.

Pair Corralation between Intuit and Automatic Data

Given the investment horizon of 90 days Intuit Inc is expected to generate 1.48 times more return on investment than Automatic Data. However, Intuit is 1.48 times more volatile than Automatic Data Processing. It trades about 0.15 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.02 per unit of risk. If you would invest  66,141  in Intuit Inc on May 10, 2025 and sell it today you would earn a total of  10,020  from holding Intuit Inc or generate 15.15% return on investment over 90 days.

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

Intuit Inc  vs.  Automatic Data Processing

Intuit Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Intuit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Automatic Data Processing

Risk-Adjusted Performance

Weakest

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Automatic Data is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Intuit and Automatic Data

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

The idea behind Intuit Inc and Automatic Data Processing 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.