Correlation Between Intuit and Cadence Design

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

By analyzing existing cross correlation between Intuit Inc and Cadence Design Systems, you can compare the effects of market volatilities on Intuit and Cadence Design 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 Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuit and Cadence Design.

Diversification Opportunities for Intuit and Cadence Design

0.63

Correlation Coefficient

Intuit  Cadence Design

Poor diversification

The 3 months correlation between Intuit and Cadence is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems 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 Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of Intuit i.e., Intuit and Cadence Design go up and down completely randomly.

Pair Corralation between Intuit and Cadence Design

Given the investment horizon of 90 days Intuit is expected to generate 4.53 times less return on investment than Cadence Design. But when comparing it to its historical volatility, Intuit Inc is 1.05 times less risky than Cadence Design. It trades about 0.01 of its potential returns per unit of risk. Cadence Design Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  33,223  in Cadence Design Systems on September 12, 2025 and sell it today you would earn a total of  583.00  from holding Cadence Design Systems or generate 1.75% return on investment over 90 days.

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

Intuit Inc  vs.  Cadence Design Systems

Intuit Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intuit Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Cadence Design Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days Cadence Design Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cadence Design is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intuit and Cadence Design

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

The idea behind Intuit Inc and Cadence Design Systems 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.