Correlation Between Autohome and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Autohome and Bread Financial 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 Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome and Bread Financial Holdings, you can compare the effects of market volatilities on Autohome and Bread Financial 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 Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Bread Financial.
Diversification Opportunities for Autohome and Bread Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autohome and Bread is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Autohome i.e., Autohome and Bread Financial go up and down completely randomly.
Pair Corralation between Autohome and Bread Financial
Assuming the 90 days trading horizon Autohome is expected to generate 5.26 times less return on investment than Bread Financial. But when comparing it to its historical volatility, Autohome is 1.25 times less risky than Bread Financial. It trades about 0.02 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,638 in Bread Financial Holdings on August 31, 2024 and sell it today you would earn a total of 5,248 from holding Bread Financial Holdings or generate 144.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.04% |
| Values | Daily Returns |
Autohome vs. Bread Financial Holdings
Performance |
| Timeline |
| Autohome |
| Bread Financial Holdings |
Autohome and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Bread Financial
The main advantage of trading using opposite Autohome and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Autohome vs. Technos SA | Autohome vs. Monster Beverage | Autohome vs. Dell Technologies | Autohome vs. Agilent Technologies |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |