Correlation Between Autohome and Siemens Energy
Can any of the company-specific risk be diversified away by investing in both Autohome and Siemens Energy 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 Siemens Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and Siemens Energy AG, you can compare the effects of market volatilities on Autohome and Siemens Energy 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 Siemens Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Siemens Energy.
Diversification Opportunities for Autohome and Siemens Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autohome and Siemens is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Siemens Energy AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Energy AG 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 Siemens Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Energy AG has no effect on the direction of Autohome i.e., Autohome and Siemens Energy go up and down completely randomly.
Pair Corralation between Autohome and Siemens Energy
Assuming the 90 days trading horizon Autohome ADR is expected to under-perform the Siemens Energy. But the stock apears to be less risky and, when comparing its historical volatility, Autohome ADR is 1.48 times less risky than Siemens Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Siemens Energy AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,903 in Siemens Energy AG on October 12, 2024 and sell it today you would earn a total of 3,047 from holding Siemens Energy AG or generate 160.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. Siemens Energy AG
Performance |
| Timeline |
| Autohome ADR |
| Siemens Energy AG |
Autohome and Siemens Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Siemens Energy
The main advantage of trading using opposite Autohome and Siemens Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Siemens Energy 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 Siemens Energy will offset losses from the drop in Siemens Energy's long position.| Autohome vs. Alphabet Class A | Autohome vs. Tencent Holdings | Autohome vs. Prosus NV | Autohome vs. Superior Plus Corp |
| Siemens Energy vs. RYANAIR HLDGS ADR | Siemens Energy vs. Alfa Financial Software | Siemens Energy vs. Firan Technology Group | Siemens Energy vs. DELTA AIR LINES |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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