Correlation Between HomeToGo and Autohome
Can any of the company-specific risk be diversified away by investing in both HomeToGo 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 HomeToGo and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Autohome ADR, you can compare the effects of market volatilities on HomeToGo 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 HomeToGo with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Autohome.
Diversification Opportunities for HomeToGo and Autohome
Weak diversification
The 3 months correlation between HomeToGo and Autohome is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and HomeToGo 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 HomeToGo SE 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 ADR has no effect on the direction of HomeToGo i.e., HomeToGo and Autohome go up and down completely randomly.
Pair Corralation between HomeToGo and Autohome
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the Autohome. In addition to that, HomeToGo is 1.33 times more volatile than Autohome ADR. It trades about -0.13 of its total potential returns per unit of risk. Autohome ADR is currently generating about -0.01 per unit of volatility. If you would invest 2,600 in Autohome ADR on August 29, 2024 and sell it today you would lose (20.00) from holding Autohome ADR or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. Autohome ADR
Performance |
| Timeline |
| HomeToGo SE |
| Autohome ADR |
HomeToGo and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Autohome
The main advantage of trading using opposite HomeToGo and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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.| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
| Autohome vs. DeVry Education Group | Autohome vs. Vulcan Materials | Autohome vs. CHINA EDUCATION GROUP | Autohome vs. STRAYER EDUCATION |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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