Correlation Between Autohome ADR and HEALTHCARE TRPFD
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and HEALTHCARE TRPFD SH, you can compare the effects of market volatilities on Autohome ADR and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and HEALTHCARE TRPFD.
Diversification Opportunities for Autohome ADR and HEALTHCARE TRPFD
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Autohome and HEALTHCARE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and HEALTHCARE TRPFD SH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TRPFD 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 HEALTHCARE TRPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TRPFD has no effect on the direction of Autohome ADR i.e., Autohome ADR and HEALTHCARE TRPFD go up and down completely randomly.
Pair Corralation between Autohome ADR and HEALTHCARE TRPFD
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.96 times more return on investment than HEALTHCARE TRPFD. However, Autohome ADR is 1.05 times less risky than HEALTHCARE TRPFD. It trades about -0.08 of its potential returns per unit of risk. HEALTHCARE TRPFD SH is currently generating about -0.25 per unit of risk. If you would invest 2,540 in Autohome ADR on September 28, 2024 and sell it today you would lose (80.00) from holding Autohome ADR or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Autohome ADR vs. HEALTHCARE TRPFD SH
Performance |
| Timeline |
| Autohome ADR |
| HEALTHCARE TRPFD |
Autohome ADR and HEALTHCARE TRPFD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and HEALTHCARE TRPFD
The main advantage of trading using opposite Autohome ADR and HEALTHCARE TRPFD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, HEALTHCARE TRPFD 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 HEALTHCARE TRPFD will offset losses from the drop in HEALTHCARE TRPFD's long position.| Autohome ADR vs. AM EAGLE OUTFITTERS | Autohome ADR vs. IMAGIN MEDICAL INC | Autohome ADR vs. G III Apparel Group | Autohome ADR vs. Corporate Office Properties |
| HEALTHCARE TRPFD vs. Apple Inc | HEALTHCARE TRPFD vs. Apple Inc | HEALTHCARE TRPFD vs. Apple Inc | HEALTHCARE TRPFD vs. Apple Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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