Correlation Between PT Bank and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both PT Bank and Autohome ADR 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 PT Bank and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and Autohome ADR, you can compare the effects of market volatilities on PT Bank and Autohome ADR 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 PT Bank with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Autohome ADR.
Diversification Opportunities for PT Bank and Autohome ADR
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between BOZA and Autohome is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and PT Bank 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 PT Bank Maybank are associated (or correlated) with Autohome ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome ADR has no effect on the direction of PT Bank i.e., PT Bank and Autohome ADR go up and down completely randomly.
Pair Corralation between PT Bank and Autohome ADR
Assuming the 90 days trading horizon PT Bank Maybank is expected to under-perform the Autohome ADR. In addition to that, PT Bank is 1.66 times more volatile than Autohome ADR. It trades about -0.09 of its total potential returns per unit of risk. Autohome ADR is currently generating about -0.09 per unit of volatility. If you would invest 2,660 in Autohome ADR on August 30, 2024 and sell it today you would lose (120.00) from holding Autohome ADR or give up 4.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Maybank vs. Autohome ADR
Performance |
| Timeline |
| PT Bank Maybank |
| Autohome ADR |
PT Bank and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Autohome ADR
The main advantage of trading using opposite PT Bank and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Autohome ADR 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 Autohome ADR will offset losses from the drop in Autohome ADR's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. PT Bank Central | PT Bank vs. State Bank of | PT Bank vs. PT Bank Rakyat |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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