Correlation Between Autohome ADR and Snap
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and Snap 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 Autohome ADR and Snap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and Snap Inc, you can compare the effects of market volatilities on Autohome ADR and Snap 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 Autohome ADR with a short position of Snap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and Snap.
Diversification Opportunities for Autohome ADR and Snap
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autohome and Snap is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Snap Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap Inc and Autohome ADR 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 Autohome ADR are associated (or correlated) with Snap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap Inc has no effect on the direction of Autohome ADR i.e., Autohome ADR and Snap go up and down completely randomly.
Pair Corralation between Autohome ADR and Snap
Assuming the 90 days trading horizon Autohome ADR is expected to generate 3.05 times less return on investment than Snap. But when comparing it to its historical volatility, Autohome ADR is 1.57 times less risky than Snap. It trades about 0.06 of its potential returns per unit of risk. Snap Inc is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,103 in Snap Inc on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Snap Inc or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Autohome ADR vs. Snap Inc
Performance |
| Timeline |
| Autohome ADR |
| Snap Inc |
Autohome ADR and Snap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and Snap
The main advantage of trading using opposite Autohome ADR and Snap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, Snap 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 Snap will offset losses from the drop in Snap's long position.| Autohome ADR vs. Tencent Holdings | Autohome ADR vs. Superior Plus Corp | Autohome ADR vs. SIVERS SEMICONDUCTORS AB | Autohome ADR vs. NorAm Drilling AS |
| Snap vs. INVITATION HOMES DL | Snap vs. Focus Home Interactive | Snap vs. Autohome ADR | Snap vs. Haier Smart Home |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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