Correlation Between Automatic Data and Qualcomm

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

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

Diversification Opportunities for Automatic Data and Qualcomm

0.0

Correlation Coefficient

Automatic Data  Qualcomm

Pay attention - limited upside

The 3 months correlation between Automatic and Qualcomm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Qualcomm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualcomm and Automatic Data 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 Automatic Data Processing are associated (or correlated) with Qualcomm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualcomm has no effect on the direction of Automatic Data i.e., Automatic Data and Qualcomm go up and down completely randomly.

Pair Corralation between Automatic Data and Qualcomm

If you would invest (100.00) in Qualcomm on April 21, 2025 and sell it today you would earn a total of  100.00  from holding Qualcomm or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Automatic Data Processing  vs.  Qualcomm

Automatic Data Processing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Automatic Data is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qualcomm

Risk-Adjusted Performance

OK

Over the last 90 days Qualcomm has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Qualcomm is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Automatic Data and Qualcomm

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

The idea behind Automatic Data Processing and Qualcomm 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..