Correlation Between Autohome ADR and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and Federal Agricultural 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 Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and Federal Agricultural Mortgage, you can compare the effects of market volatilities on Autohome ADR and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and Federal Agricultural.
Diversification Opportunities for Autohome ADR and Federal Agricultural
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autohome and Federal is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of Autohome ADR i.e., Autohome ADR and Federal Agricultural go up and down completely randomly.
Pair Corralation between Autohome ADR and Federal Agricultural
Assuming the 90 days trading horizon Autohome ADR is expected to generate 1.41 times more return on investment than Federal Agricultural. However, Autohome ADR is 1.41 times more volatile than Federal Agricultural Mortgage. It trades about 0.1 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about 0.02 per unit of risk. If you would invest 2,500 in Autohome ADR on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Autohome ADR or generate 4.0% 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. Federal Agricultural Mortgage
Performance |
| Timeline |
| Autohome ADR |
| Federal Agricultural |
Autohome ADR and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and Federal Agricultural
The main advantage of trading using opposite Autohome ADR and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| Autohome ADR vs. WT OFFSHORE | Autohome ADR vs. RYU Apparel | Autohome ADR vs. American Eagle Outfitters | Autohome ADR vs. Columbia Sportswear |
| Federal Agricultural vs. CNVISION MEDIA | Federal Agricultural vs. XLMedia PLC | Federal Agricultural vs. HomeToGo SE | Federal Agricultural vs. Autohome ADR |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |