Correlation Between Unifique Telecomunicaes and Autohome
Can any of the company-specific risk be diversified away by investing in both Unifique Telecomunicaes and Autohome 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 Unifique Telecomunicaes and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unifique Telecomunicaes SA and Autohome, you can compare the effects of market volatilities on Unifique Telecomunicaes and Autohome 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 Unifique Telecomunicaes with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifique Telecomunicaes and Autohome.
Diversification Opportunities for Unifique Telecomunicaes and Autohome
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Unifique and Autohome is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Unifique Telecomunicaes 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 Unifique Telecomunicaes SA are associated (or correlated) with Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome has no effect on the direction of Unifique Telecomunicaes i.e., Unifique Telecomunicaes and Autohome go up and down completely randomly.
Pair Corralation between Unifique Telecomunicaes and Autohome
Assuming the 90 days trading horizon Unifique Telecomunicaes is expected to generate 1.48 times less return on investment than Autohome. But when comparing it to its historical volatility, Unifique Telecomunicaes SA is 1.54 times less risky than Autohome. It trades about 0.02 of its potential returns per unit of risk. Autohome is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,570 in Autohome on September 3, 2024 and sell it today you would earn a total of 67.00 from holding Autohome or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.4% |
| Values | Daily Returns |
Unifique Telecomunicaes SA vs. Autohome
Performance |
| Timeline |
| Unifique Telecomunicaes |
| Autohome |
Unifique Telecomunicaes and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unifique Telecomunicaes and Autohome
The main advantage of trading using opposite Unifique Telecomunicaes and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes position performs unexpectedly, Autohome 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 will offset losses from the drop in Autohome's long position.| Unifique Telecomunicaes vs. T Mobile | Unifique Telecomunicaes vs. Verizon Communications | Unifique Telecomunicaes vs. Telefnica Brasil SA | Unifique Telecomunicaes vs. TIM SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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