Correlation Between Autohome and UET United
Can any of the company-specific risk be diversified away by investing in both Autohome and UET United 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 UET United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and UET United Electronic, you can compare the effects of market volatilities on Autohome and UET United 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 UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and UET United.
Diversification Opportunities for Autohome and UET United
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autohome and UET is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Autohome i.e., Autohome and UET United go up and down completely randomly.
Pair Corralation between Autohome and UET United
Assuming the 90 days trading horizon Autohome is expected to generate 27.0 times less return on investment than UET United. But when comparing it to its historical volatility, Autohome ADR is 2.9 times less risky than UET United. It trades about 0.03 of its potential returns per unit of risk. UET United Electronic is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 82.00 in UET United Electronic on August 25, 2024 and sell it today you would earn a total of 28.00 from holding UET United Electronic or generate 34.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Autohome ADR vs. UET United Electronic
Performance |
| Timeline |
| Autohome ADR |
| UET United Electronic |
Autohome and UET United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and UET United
The main advantage of trading using opposite Autohome and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.| Autohome vs. Microbot Medical | Autohome vs. Apollo Medical Holdings | Autohome vs. Meli Hotels International | Autohome vs. Dalata Hotel Group |
| UET United vs. Cisco Systems | UET United vs. Telefonaktiebolaget LM Ericsson | UET United vs. Superior Plus Corp | UET United 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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