Correlation Between HYDROFARM HLD and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Autohome ADR 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 HYDROFARM HLD and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and Autohome ADR, you can compare the effects of market volatilities on HYDROFARM HLD and Autohome ADR 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 HYDROFARM HLD with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Autohome ADR.
Diversification Opportunities for HYDROFARM HLD and Autohome ADR
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HYDROFARM and Autohome is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and HYDROFARM HLD 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 HYDROFARM HLD GRP are associated (or correlated) with Autohome ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Autohome ADR go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Autohome ADR
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to under-perform the Autohome ADR. In addition to that, HYDROFARM HLD is 2.36 times more volatile than Autohome ADR. It trades about -0.21 of its total potential returns per unit of risk. Autohome ADR is currently generating about -0.1 per unit of volatility. If you would invest 2,600 in Autohome ADR on September 25, 2024 and sell it today you would lose (100.00) from holding Autohome ADR or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Autohome ADR
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Autohome ADR |
HYDROFARM HLD and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Autohome ADR
The main advantage of trading using opposite HYDROFARM HLD and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Autohome ADR 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 Autohome ADR will offset losses from the drop in Autohome ADR's long position.| HYDROFARM HLD vs. Caterpillar | HYDROFARM HLD vs. Caterpillar | HYDROFARM HLD vs. Deere Company | HYDROFARM HLD vs. AB Volvo |
| Autohome ADR vs. Alphabet Class A | Autohome ADR vs. Alphabet | Autohome ADR vs. Meta Platforms | Autohome ADR vs. Tencent Holdings Ltd |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |