Correlation Between Autohome and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Autohome and Costco Wholesale 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 Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome and Costco Wholesale, you can compare the effects of market volatilities on Autohome and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Costco Wholesale.
Diversification Opportunities for Autohome and Costco Wholesale
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Autohome and Costco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale has no effect on the direction of Autohome i.e., Autohome and Costco Wholesale go up and down completely randomly.
Pair Corralation between Autohome and Costco Wholesale
Assuming the 90 days trading horizon Autohome is expected to generate 4.19 times less return on investment than Costco Wholesale. In addition to that, Autohome is 1.85 times more volatile than Costco Wholesale. It trades about 0.02 of its total potential returns per unit of risk. Costco Wholesale is currently generating about 0.17 per unit of volatility. If you would invest 6,180 in Costco Wholesale on August 31, 2024 and sell it today you would earn a total of 8,324 from holding Costco Wholesale or generate 134.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.3% |
| Values | Daily Returns |
Autohome vs. Costco Wholesale
Performance |
| Timeline |
| Autohome |
| Costco Wholesale |
Autohome and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Costco Wholesale
The main advantage of trading using opposite Autohome and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Autohome vs. Technos SA | Autohome vs. Monster Beverage | Autohome vs. Dell Technologies | Autohome vs. Agilent Technologies |
| Costco Wholesale vs. Walmart | Costco Wholesale vs. Fras le SA | Costco Wholesale vs. Energisa SA | Costco Wholesale vs. Clave Indices De |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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