Correlation Between Autohome ADR and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Autohome ADR and Origin 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 ADR and Origin 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 Origin Energy Limited, you can compare the effects of market volatilities on Autohome ADR and Origin 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 ADR with a short position of Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome ADR and Origin Energy.
Diversification Opportunities for Autohome ADR and Origin Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Autohome and Origin is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Origin Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy Limited 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy Limited has no effect on the direction of Autohome ADR i.e., Autohome ADR and Origin Energy go up and down completely randomly.
Pair Corralation between Autohome ADR and Origin Energy
Assuming the 90 days trading horizon Autohome ADR is expected to under-perform the Origin Energy. In addition to that, Autohome ADR is 1.73 times more volatile than Origin Energy Limited. It trades about -0.01 of its total potential returns per unit of risk. Origin Energy Limited is currently generating about 0.5 per unit of volatility. If you would invest 580.00 in Origin Energy Limited on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Origin Energy Limited or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Autohome ADR vs. Origin Energy Limited
Performance |
| Timeline |
| Autohome ADR |
| Origin Energy Limited |
Autohome ADR and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome ADR and Origin Energy
The main advantage of trading using opposite Autohome ADR and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome ADR position performs unexpectedly, Origin 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Autohome ADR vs. Alphabet Class A | Autohome ADR vs. Meta Platforms | Autohome ADR vs. Meta Platforms | Autohome ADR vs. Tencent Holdings |
| Origin Energy vs. Jacquet Metal Service | Origin Energy vs. Treasury Wine Estates | Origin Energy vs. BOSTON BEER A | Origin Energy vs. FIREWEED METALS P |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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