Correlation Between Public Service and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both Public Service 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 Public Service and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Autohome ADR, you can compare the effects of market volatilities on Public Service 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 Public Service with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Autohome ADR.
Diversification Opportunities for Public Service and Autohome ADR
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Autohome is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and Public Service 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 Public Service Enterprise 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 Public Service i.e., Public Service and Autohome ADR go up and down completely randomly.
Pair Corralation between Public Service and Autohome ADR
Assuming the 90 days horizon Public Service Enterprise is expected to generate 1.94 times more return on investment than Autohome ADR. However, Public Service is 1.94 times more volatile than Autohome ADR. It trades about 0.48 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.04 per unit of risk. If you would invest 1,081 in Public Service Enterprise on September 12, 2024 and sell it today you would earn a total of 559.00 from holding Public Service Enterprise or generate 51.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Service Enterprise vs. Autohome ADR
Performance |
| Timeline |
| Public Service Enterprise |
| Autohome ADR |
Public Service and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and Autohome ADR
The main advantage of trading using opposite Public Service and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service 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.| Public Service vs. Lery Seafood Group | Public Service vs. MUTUIONLINE | Public Service vs. Austevoll Seafood ASA | Public Service vs. VARIOUS EATERIES LS |
| Autohome ADR vs. Tencent Holdings | Autohome ADR vs. Superior Plus Corp | Autohome ADR vs. SIVERS SEMICONDUCTORS AB | Autohome ADR vs. NorAm Drilling AS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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