Correlation Between Broadridge Financial and Autodesk

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

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

Diversification Opportunities for Broadridge Financial and Autodesk

0.25

Correlation Coefficient

Broadridge Financial  Autodesk

Modest diversification

The 3 months correlation between Broadridge and Autodesk is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Broadridge Financial 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 Broadridge Financial Solutions, are associated (or correlated) with Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of Broadridge Financial i.e., Broadridge Financial and Autodesk go up and down completely randomly.

Pair Corralation between Broadridge Financial and Autodesk

Assuming the 90 days trading horizon Broadridge Financial is expected to generate 4.15 times less return on investment than Autodesk. But when comparing it to its historical volatility, Broadridge Financial Solutions, is 6.95 times less risky than Autodesk. It trades about 0.13 of its potential returns per unit of risk. Autodesk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  37,778  in Autodesk on April 23, 2025 and sell it today you would earn a total of  2,666  from holding Autodesk or generate 7.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Broadridge Financial Solutions  vs.  Autodesk

Broadridge Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Broadridge Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Autodesk

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autodesk may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Broadridge Financial and Autodesk

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

The idea behind Broadridge Financial Solutions, and Autodesk 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.