Correlation Between Autohome ADR and MGP Ingredients
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and MGP Ingredients 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 MGP Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and MGP Ingredients, you can compare the effects of market volatilities on Autohome ADR and MGP Ingredients 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 MGP Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and MGP Ingredients.
Diversification Opportunities for Autohome ADR and MGP Ingredients
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Autohome and MGP is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and MGP Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGP Ingredients 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 MGP Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGP Ingredients has no effect on the direction of Autohome ADR i.e., Autohome ADR and MGP Ingredients go up and down completely randomly.
Pair Corralation between Autohome ADR and MGP Ingredients
Assuming the 90 days trading horizon Autohome ADR is expected to generate 0.87 times more return on investment than MGP Ingredients. However, Autohome ADR is 1.16 times less risky than MGP Ingredients. It trades about 0.01 of its potential returns per unit of risk. MGP Ingredients is currently generating about -0.08 per unit of risk. If you would invest 2,592 in Autohome ADR on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Autohome ADR or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. MGP Ingredients
Performance |
| Timeline |
| Autohome ADR |
| MGP Ingredients |
Autohome ADR and MGP Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and MGP Ingredients
The main advantage of trading using opposite Autohome ADR and MGP Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, MGP Ingredients 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 MGP Ingredients will offset losses from the drop in MGP Ingredients' 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 |
| MGP Ingredients vs. Dairy Farm International | MGP Ingredients vs. KB HOME | MGP Ingredients vs. Tri Pointe Homes | MGP Ingredients vs. Autohome ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |