Correlation Between MediaAlpha and Autohome
Can any of the company-specific risk be diversified away by investing in both MediaAlpha 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 MediaAlpha and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Autohome, you can compare the effects of market volatilities on MediaAlpha 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 MediaAlpha with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Autohome.
Diversification Opportunities for MediaAlpha and Autohome
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MediaAlpha and Autohome is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and MediaAlpha 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 MediaAlpha 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 MediaAlpha i.e., MediaAlpha and Autohome go up and down completely randomly.
Pair Corralation between MediaAlpha and Autohome
Considering the 90-day investment horizon MediaAlpha is expected to generate 1.85 times more return on investment than Autohome. However, MediaAlpha is 1.85 times more volatile than Autohome. It trades about 0.03 of its potential returns per unit of risk. Autohome is currently generating about 0.01 per unit of risk. If you would invest 1,055 in MediaAlpha on August 28, 2024 and sell it today you would earn a total of 242.00 from holding MediaAlpha or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaAlpha vs. Autohome
Performance |
| Timeline |
| MediaAlpha |
| Autohome |
MediaAlpha and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Autohome
The main advantage of trading using opposite MediaAlpha and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha 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.| MediaAlpha vs. Alphabet Inc Class C | MediaAlpha vs. Twilio Inc | MediaAlpha vs. Snap Inc | MediaAlpha vs. Baidu Inc |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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