Correlation Between Autohome and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Autohome and Tsingtao Brewery 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 Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome ADR and Tsingtao Brewery, you can compare the effects of market volatilities on Autohome and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Tsingtao Brewery.
Diversification Opportunities for Autohome and Tsingtao Brewery
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autohome and Tsingtao is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Autohome ADR and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Autohome i.e., Autohome and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Autohome and Tsingtao Brewery
Assuming the 90 days trading horizon Autohome ADR is expected to generate 2.22 times more return on investment than Tsingtao Brewery. However, Autohome is 2.22 times more volatile than Tsingtao Brewery. It trades about 0.15 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about -0.2 per unit of risk. If you would invest 2,500 in Autohome ADR on November 7, 2024 and sell it today you would earn a total of 280.00 from holding Autohome ADR or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Autohome ADR vs. Tsingtao Brewery
Performance |
| Timeline |
| Autohome ADR |
| Tsingtao Brewery |
Autohome and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Tsingtao Brewery
The main advantage of trading using opposite Autohome and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Autohome vs. TOWNSQUARE MEDIA INC | Autohome vs. International Game Technology | Autohome vs. PLAYMATES TOYS | Autohome vs. MOVIE GAMES SA |
| Tsingtao Brewery vs. CENTURIA OFFICE REIT | Tsingtao Brewery vs. Tradeweb Markets | Tsingtao Brewery vs. MAVEN WIRELESS SWEDEN | Tsingtao Brewery vs. Fevertree Drinks PLC |
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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