Correlation Between Perion Network and Autohome
Can any of the company-specific risk be diversified away by investing in both Perion Network 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 Perion Network and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perion Network and Autohome, you can compare the effects of market volatilities on Perion Network 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 Perion Network with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perion Network and Autohome.
Diversification Opportunities for Perion Network and Autohome
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perion and Autohome is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Perion Network and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Perion Network 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 Perion Network 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 Perion Network i.e., Perion Network and Autohome go up and down completely randomly.
Pair Corralation between Perion Network and Autohome
Given the investment horizon of 90 days Perion Network is expected to under-perform the Autohome. In addition to that, Perion Network is 1.68 times more volatile than Autohome. It trades about -0.07 of its total potential returns per unit of risk. Autohome is currently generating about 0.01 per unit of volatility. If you would invest 2,787 in Autohome on August 27, 2024 and sell it today you would lose (27.00) from holding Autohome or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perion Network vs. Autohome
Performance |
| Timeline |
| Perion Network |
| Autohome |
Perion Network and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perion Network and Autohome
The main advantage of trading using opposite Perion Network and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perion Network 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.| Perion Network vs. MediaAlpha | Perion Network vs. Vivid Seats | Perion Network vs. Jiayin Group | Perion Network vs. Hello Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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