Correlation Between Autohome and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Autohome and ASML Holding 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 ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and ASML Holding NV, you can compare the effects of market volatilities on Autohome and ASML Holding 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 ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and ASML Holding.
Diversification Opportunities for Autohome and ASML Holding
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autohome and ASML is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV 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 ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Autohome i.e., Autohome and ASML Holding go up and down completely randomly.
Pair Corralation between Autohome and ASML Holding
Assuming the 90 days trading horizon Autohome is expected to generate 1.88 times less return on investment than ASML Holding. In addition to that, Autohome is 1.1 times more volatile than ASML Holding NV. It trades about 0.01 of its total potential returns per unit of risk. ASML Holding NV is currently generating about 0.02 per unit of volatility. If you would invest 56,250 in ASML Holding NV on August 28, 2024 and sell it today you would earn a total of 8,940 from holding ASML Holding NV or generate 15.89% 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. ASML Holding NV
Performance |
| Timeline |
| Autohome ADR |
| ASML Holding NV |
Autohome and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and ASML Holding
The main advantage of trading using opposite Autohome and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.| Autohome vs. Retail Estates NV | Autohome vs. Zijin Mining Group | Autohome vs. SPARTAN STORES | Autohome vs. MCEWEN MINING INC |
| ASML Holding vs. ASML HOLDING NY | ASML Holding vs. Applied Materials | ASML Holding vs. Superior Plus Corp | ASML Holding vs. NMI Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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