Correlation Between Autohome and BROADWIND ENRGY
Can any of the company-specific risk be diversified away by investing in both Autohome and BROADWIND ENRGY 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 BROADWIND ENRGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and BROADWIND ENRGY, you can compare the effects of market volatilities on Autohome and BROADWIND ENRGY 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 BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and BROADWIND ENRGY.
Diversification Opportunities for Autohome and BROADWIND ENRGY
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autohome and BROADWIND is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY 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 BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Autohome i.e., Autohome and BROADWIND ENRGY go up and down completely randomly.
Pair Corralation between Autohome and BROADWIND ENRGY
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.63 times more return on investment than BROADWIND ENRGY. However, Autohome ADR is 1.6 times less risky than BROADWIND ENRGY. It trades about 0.1 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about -0.04 per unit of risk. If you would invest 2,397 in Autohome ADR on November 6, 2024 and sell it today you would earn a total of 383.00 from holding Autohome ADR or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. BROADWIND ENRGY
Performance |
| Timeline |
| Autohome ADR |
| BROADWIND ENRGY |
Autohome and BROADWIND ENRGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and BROADWIND ENRGY
The main advantage of trading using opposite Autohome and BROADWIND ENRGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, BROADWIND ENRGY 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 BROADWIND ENRGY will offset losses from the drop in BROADWIND ENRGY's long position.| Autohome vs. Alfa Financial Software | Autohome vs. MAGIC SOFTWARE ENTR | Autohome vs. PLAYWAY SA ZY 10 | Autohome vs. Playtech plc |
| BROADWIND ENRGY vs. WILLIS LEASE FIN | BROADWIND ENRGY vs. MARKET VECTR RETAIL | BROADWIND ENRGY vs. H2O Retailing | BROADWIND ENRGY vs. FIRST SHIP LEASE |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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