Correlation Between METISA Metalrgica and Autohome
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica 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 METISA Metalrgica and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METISA Metalrgica Timboense and Autohome, you can compare the effects of market volatilities on METISA Metalrgica 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 METISA Metalrgica with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Autohome.
Diversification Opportunities for METISA Metalrgica and Autohome
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METISA and Autohome is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and METISA Metalrgica 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 METISA Metalrgica Timboense 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 METISA Metalrgica i.e., METISA Metalrgica and Autohome go up and down completely randomly.
Pair Corralation between METISA Metalrgica and Autohome
Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the Autohome. But the preferred stock apears to be less risky and, when comparing its historical volatility, METISA Metalrgica Timboense is 1.32 times less risky than Autohome. The preferred stock trades about 0.0 of its potential returns per unit of risk. The Autohome is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,506 in Autohome on August 31, 2024 and sell it today you would earn a total of 131.00 from holding Autohome or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.83% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. Autohome
Performance |
| Timeline |
| METISA Metalrgica |
| Autohome |
METISA Metalrgica and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and Autohome
The main advantage of trading using opposite METISA Metalrgica and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica 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.| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi SA |
| Autohome vs. Technos SA | Autohome vs. Monster Beverage | Autohome vs. Dell Technologies | Autohome vs. Agilent Technologies |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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