Correlation Between Autohome ADR and HEMISPHERE EGY
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and HEMISPHERE EGY 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 HEMISPHERE EGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and HEMISPHERE EGY, you can compare the effects of market volatilities on Autohome ADR and HEMISPHERE EGY 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 HEMISPHERE EGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and HEMISPHERE EGY.
Diversification Opportunities for Autohome ADR and HEMISPHERE EGY
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Autohome and HEMISPHERE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and HEMISPHERE EGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEMISPHERE EGY 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 HEMISPHERE EGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEMISPHERE EGY has no effect on the direction of Autohome ADR i.e., Autohome ADR and HEMISPHERE EGY go up and down completely randomly.
Pair Corralation between Autohome ADR and HEMISPHERE EGY
Assuming the 90 days trading horizon Autohome ADR is expected to under-perform the HEMISPHERE EGY. In addition to that, Autohome ADR is 1.02 times more volatile than HEMISPHERE EGY. It trades about -0.09 of its total potential returns per unit of risk. HEMISPHERE EGY is currently generating about -0.01 per unit of volatility. If you would invest 124.00 in HEMISPHERE EGY on August 30, 2024 and sell it today you would lose (1.00) from holding HEMISPHERE EGY or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome ADR vs. HEMISPHERE EGY
Performance |
| Timeline |
| Autohome ADR |
| HEMISPHERE EGY |
Autohome ADR and HEMISPHERE EGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and HEMISPHERE EGY
The main advantage of trading using opposite Autohome ADR and HEMISPHERE EGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, HEMISPHERE EGY 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 HEMISPHERE EGY will offset losses from the drop in HEMISPHERE EGY's long position.| Autohome ADR vs. SCIENCE IN SPORT | Autohome ADR vs. Air Transport Services | Autohome ADR vs. AVITA Medical | Autohome ADR vs. Fukuyama Transporting Co |
| HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Apple Inc | HEMISPHERE EGY vs. Superior Plus Corp | HEMISPHERE EGY vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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