Correlation Between Unity Software and Autohome
Can any of the company-specific risk be diversified away by investing in both Unity Software 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 Unity Software and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unity Software and Autohome, you can compare the effects of market volatilities on Unity Software 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 Unity Software with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unity Software and Autohome.
Diversification Opportunities for Unity Software and Autohome
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unity and Autohome is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Unity Software 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 Unity Software 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 Unity Software i.e., Unity Software and Autohome go up and down completely randomly.
Pair Corralation between Unity Software and Autohome
Assuming the 90 days trading horizon Unity Software is expected to generate 2.43 times less return on investment than Autohome. In addition to that, Unity Software is 1.56 times more volatile than Autohome. It trades about 0.01 of its total potential returns per unit of risk. Autohome is currently generating about 0.02 per unit of volatility. 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 Together |
| Strength | Weak |
| Accuracy | 88.83% |
| Values | Daily Returns |
Unity Software vs. Autohome
Performance |
| Timeline |
| Unity Software |
| Autohome |
Unity Software and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unity Software and Autohome
The main advantage of trading using opposite Unity Software and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity Software 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.| Unity Software vs. Paycom Software | Unity Software vs. Monster Beverage | Unity Software vs. Align Technology | Unity Software vs. Tyson Foods |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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