Correlation Between Autohome ADR and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and TROPHY GAMES 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 TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and TROPHY GAMES DEV, you can compare the effects of market volatilities on Autohome ADR and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and TROPHY GAMES.
Diversification Opportunities for Autohome ADR and TROPHY GAMES
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Autohome and TROPHY is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of Autohome ADR i.e., Autohome ADR and TROPHY GAMES go up and down completely randomly.
Pair Corralation between Autohome ADR and TROPHY GAMES
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.86 times more return on investment than TROPHY GAMES. However, Autohome ADR is 1.16 times less risky than TROPHY GAMES. It trades about 0.06 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.03 per unit of risk. If you would invest 2,240 in Autohome ADR on September 21, 2024 and sell it today you would earn a total of 280.00 from holding Autohome ADR or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. TROPHY GAMES DEV
Performance |
| Timeline |
| Autohome ADR |
| TROPHY GAMES DEV |
Autohome ADR and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and TROPHY GAMES
The main advantage of trading using opposite Autohome ADR and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES'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 |
| TROPHY GAMES vs. HANOVER INSURANCE | TROPHY GAMES vs. Games Workshop Group | TROPHY GAMES vs. FUTURE GAMING GRP | TROPHY GAMES vs. GAMING FAC SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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