Correlation Between Autohome and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both Autohome and ONWARD MEDICAL 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 and ONWARD MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and ONWARD MEDICAL BV, you can compare the effects of market volatilities on Autohome and ONWARD MEDICAL 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 with a short position of ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and ONWARD MEDICAL.
Diversification Opportunities for Autohome and ONWARD MEDICAL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Autohome and ONWARD is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV and Autohome 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Autohome i.e., Autohome and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between Autohome and ONWARD MEDICAL
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.68 times more return on investment than ONWARD MEDICAL. However, Autohome ADR is 1.48 times less risky than ONWARD MEDICAL. It trades about -0.06 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about -0.11 per unit of risk. If you would invest 2,600 in Autohome ADR on September 1, 2024 and sell it today you would lose (80.00) from holding Autohome ADR or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| Autohome ADR |
| ONWARD MEDICAL BV |
Autohome and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and ONWARD MEDICAL
The main advantage of trading using opposite Autohome and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL's long position.| Autohome vs. International Consolidated Airlines | Autohome vs. INTERSHOP Communications Aktiengesellschaft | Autohome vs. Ribbon Communications | Autohome vs. LION ONE METALS |
| ONWARD MEDICAL vs. Superior Plus Corp | ONWARD MEDICAL vs. NMI Holdings | ONWARD MEDICAL vs. Origin Agritech | ONWARD MEDICAL vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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