Correlation Between Autohome ADR and GALENA MINING
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and GALENA MINING 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 GALENA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and GALENA MINING LTD, you can compare the effects of market volatilities on Autohome ADR and GALENA MINING 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 GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and GALENA MINING.
Diversification Opportunities for Autohome ADR and GALENA MINING
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Autohome and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD 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 GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of Autohome ADR i.e., Autohome ADR and GALENA MINING go up and down completely randomly.
Pair Corralation between Autohome ADR and GALENA MINING
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.37 times more return on investment than GALENA MINING. However, Autohome ADR is 2.71 times less risky than GALENA MINING. It trades about 0.01 of its potential returns per unit of risk. GALENA MINING LTD is currently generating about -0.02 per unit of risk. If you would invest 2,557 in Autohome ADR on September 19, 2024 and sell it today you would earn a total of 83.00 from holding Autohome ADR or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Autohome ADR vs. GALENA MINING LTD
Performance |
| Timeline |
| Autohome ADR |
| GALENA MINING LTD |
Autohome ADR and GALENA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and GALENA MINING
The main advantage of trading using opposite Autohome ADR and GALENA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, GALENA MINING 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 GALENA MINING will offset losses from the drop in GALENA MINING's long position.| Autohome ADR vs. Tencent Holdings | Autohome ADR vs. Superior Plus Corp | Autohome ADR vs. SIVERS SEMICONDUCTORS AB | Autohome ADR vs. NorAm Drilling AS |
| GALENA MINING vs. Iridium Communications | GALENA MINING vs. JLT MOBILE PUTER | GALENA MINING vs. Mobilezone Holding AG | GALENA MINING vs. TIANDE CHEMICAL |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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