Correlation Between United Utilities and Autohome ADR
Can any of the company-specific risk be diversified away by investing in both United Utilities 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 United Utilities and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Autohome ADR, you can compare the effects of market volatilities on United Utilities 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 United Utilities with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Autohome ADR.
Diversification Opportunities for United Utilities and Autohome ADR
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Autohome is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and United Utilities 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 United Utilities Group 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 United Utilities i.e., United Utilities and Autohome ADR go up and down completely randomly.
Pair Corralation between United Utilities and Autohome ADR
Assuming the 90 days trading horizon United Utilities Group is expected to generate 0.72 times more return on investment than Autohome ADR. However, United Utilities Group is 1.4 times less risky than Autohome ADR. It trades about 0.16 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.04 per unit of risk. If you would invest 1,244 in United Utilities Group on September 12, 2024 and sell it today you would earn a total of 66.00 from holding United Utilities Group or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Utilities Group vs. Autohome ADR
Performance |
| Timeline |
| United Utilities |
| Autohome ADR |
United Utilities and Autohome ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Autohome ADR
The main advantage of trading using opposite United Utilities and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities 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.| United Utilities vs. Sunstone Hotel Investors | United Utilities vs. MIRAMAR HOTEL INV | United Utilities vs. MTI WIRELESS EDGE | United Utilities vs. Infrastrutture Wireless Italiane |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |