Correlation Between Autohome and Lizhi
Can any of the company-specific risk be diversified away by investing in both Autohome and Lizhi 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 Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autohome and Lizhi Inc, you can compare the effects of market volatilities on Autohome and Lizhi 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 Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autohome and Lizhi.
Diversification Opportunities for Autohome and Lizhi
Very weak diversification
The 3 months correlation between Autohome and Lizhi is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Autohome and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc 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 Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Autohome i.e., Autohome and Lizhi go up and down completely randomly.
Pair Corralation between Autohome and Lizhi
Given the investment horizon of 90 days Autohome is expected to generate 0.42 times more return on investment than Lizhi. However, Autohome is 2.39 times less risky than Lizhi. It trades about -0.01 of its potential returns per unit of risk. Lizhi Inc is currently generating about -0.01 per unit of risk. If you would invest 3,262 in Autohome on August 27, 2024 and sell it today you would lose (502.00) from holding Autohome or give up 15.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 25.71% |
| Values | Daily Returns |
Autohome vs. Lizhi Inc
Performance |
| Timeline |
| Autohome |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Autohome and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autohome and Lizhi
The main advantage of trading using opposite Autohome and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autohome position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| Autohome vs. Hello Group | Autohome vs. Weibo Corp | Autohome vs. Tencent Music Entertainment | Autohome vs. DouYu International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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