Correlation Between Uber Technologies and Autohome
Can any of the company-specific risk be diversified away by investing in both Uber Technologies 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 Uber Technologies and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Autohome, you can compare the effects of market volatilities on Uber Technologies 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 Uber Technologies with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Autohome.
Diversification Opportunities for Uber Technologies and Autohome
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Uber and Autohome is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Uber Technologies 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 Uber Technologies 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 Uber Technologies i.e., Uber Technologies and Autohome go up and down completely randomly.
Pair Corralation between Uber Technologies and Autohome
Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the Autohome. In addition to that, Uber Technologies is 1.36 times more volatile than Autohome. It trades about -0.13 of its total potential returns per unit of risk. Autohome is currently generating about 0.18 per unit of volatility. If you would invest 1,557 in Autohome on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Autohome or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Autohome
Performance |
| Timeline |
| Uber Technologies |
| Autohome |
Uber Technologies and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Autohome
The main advantage of trading using opposite Uber Technologies and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies 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.| Uber Technologies vs. ServiceNow | Uber Technologies vs. Shopify | Uber Technologies vs. Autodesk | Uber Technologies vs. The Trade Desk |
| Autohome vs. Nordon Indstrias Metalrgicas | Autohome vs. Uber Technologies | Autohome vs. Technos SA | Autohome vs. The Home Depot |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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