Correlation Between Autohome ADR and Cintas
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and Cintas 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 Cintas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and Cintas, you can compare the effects of market volatilities on Autohome ADR and Cintas 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 Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and Cintas.
Diversification Opportunities for Autohome ADR and Cintas
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autohome and Cintas is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Autohome ADR i.e., Autohome ADR and Cintas go up and down completely randomly.
Pair Corralation between Autohome ADR and Cintas
Assuming the 90 days trading horizon Autohome ADR is expected to generate 9.51 times less return on investment than Cintas. In addition to that, Autohome ADR is 2.02 times more volatile than Cintas. It trades about 0.01 of its total potential returns per unit of risk. Cintas is currently generating about 0.12 per unit of volatility. If you would invest 10,278 in Cintas on September 3, 2024 and sell it today you would earn a total of 11,252 from holding Cintas or generate 109.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. Cintas
Performance |
| Timeline |
| Autohome ADR |
| Cintas |
Autohome ADR and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and Cintas
The main advantage of trading using opposite Autohome ADR and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Autohome ADR vs. Air Transport Services | Autohome ADR vs. RETAIL FOOD GROUP | Autohome ADR vs. QUEEN S ROAD | Autohome ADR vs. COPLAND ROAD CAPITAL |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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