Correlation Between Autohome and Moodys
Can any of the company-specific risk be diversified away by investing in both Autohome and Moodys 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 Moodys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome and Moodys, you can compare the effects of market volatilities on Autohome and Moodys 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 Moodys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Moodys.
Diversification Opportunities for Autohome and Moodys
Good diversification
The 3 months correlation between Autohome and Moodys is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and Moodys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moodys 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 Moodys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moodys has no effect on the direction of Autohome i.e., Autohome and Moodys go up and down completely randomly.
Pair Corralation between Autohome and Moodys
Assuming the 90 days trading horizon Autohome is expected to generate 1.28 times less return on investment than Moodys. In addition to that, Autohome is 1.18 times more volatile than Moodys. It trades about 0.18 of its total potential returns per unit of risk. Moodys is currently generating about 0.27 per unit of volatility. If you would invest 68,640 in Moodys on September 12, 2024 and sell it today you would earn a total of 6,217 from holding Moodys or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autohome vs. Moodys
Performance |
| Timeline |
| Autohome |
| Moodys |
Autohome and Moodys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Moodys
The main advantage of trading using opposite Autohome and Moodys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Moodys 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 Moodys will offset losses from the drop in Moodys' long position.| Autohome vs. Capital One Financial | Autohome vs. Beyond Meat | Autohome vs. G2D Investments | Autohome vs. Bread Financial Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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