Correlation Between Pilgrims Pride and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both Pilgrims Pride 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 Pilgrims Pride and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pilgrims Pride and Autohome ADR, you can compare the effects of market volatilities on Pilgrims Pride 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 Pilgrims Pride with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pilgrims Pride and Autohome ADR.
Diversification Opportunities for Pilgrims Pride and Autohome ADR
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pilgrims and Autohome is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pilgrims Pride and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and Pilgrims Pride 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 Pilgrims Pride 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 Pilgrims Pride i.e., Pilgrims Pride and Autohome ADR go up and down completely randomly.
Pair Corralation between Pilgrims Pride and Autohome ADR
Assuming the 90 days horizon Pilgrims Pride is expected to generate 0.79 times more return on investment than Autohome ADR. However, Pilgrims Pride is 1.26 times less risky than Autohome ADR. It trades about 0.14 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.03 per unit of risk. If you would invest 2,340 in Pilgrims Pride on September 14, 2024 and sell it today you would earn a total of 2,260 from holding Pilgrims Pride or generate 96.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pilgrims Pride vs. Autohome ADR
Performance |
| Timeline |
| Pilgrims Pride |
| Autohome ADR |
Pilgrims Pride and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pilgrims Pride and Autohome ADR
The main advantage of trading using opposite Pilgrims Pride and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pilgrims Pride 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.| Pilgrims Pride vs. HYATT HOTELS A | Pilgrims Pride vs. ONWARD MEDICAL BV | Pilgrims Pride vs. InterContinental Hotels Group | Pilgrims Pride vs. Merit Medical Systems |
| Autohome ADR vs. WT OFFSHORE | Autohome ADR vs. RYU Apparel | Autohome ADR vs. American Eagle Outfitters | Autohome ADR vs. Columbia Sportswear |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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