Correlation Between REMEDY ENTERTAINMENT and AUTOHOME INC

Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT and AUTOHOME INC 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 REMEDY ENTERTAINMENT and AUTOHOME INC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and AUTOHOME INC A, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and AUTOHOME INC 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 REMEDY ENTERTAINMENT with a short position of AUTOHOME INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and AUTOHOME INC.

Diversification Opportunities for REMEDY ENTERTAINMENT and AUTOHOME INC

-0.01

Correlation Coefficient

REMEDY ENTERTAINMENT  AUTOHOME INC

Good diversification

The 3 months correlation between REMEDY and AUTOHOME is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and AUTOHOME INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUTOHOME INC A and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with AUTOHOME INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUTOHOME INC A has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and AUTOHOME INC go up and down completely randomly.

Pair Corralation between REMEDY ENTERTAINMENT and AUTOHOME INC

Assuming the 90 days horizon REMEDY ENTERTAINMENT is expected to generate 37.0 times less return on investment than AUTOHOME INC. But when comparing it to its historical volatility, REMEDY ENTERTAINMENT OYJ is 1.63 times less risky than AUTOHOME INC. It trades about 0.0 of its potential returns per unit of risk. AUTOHOME INC A is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  561.00  in AUTOHOME INC A on December 22, 2024 and sell it today you would earn a total of  104.00  from holding AUTOHOME INC A or generate 18.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

REMEDY ENTERTAINMENT OYJ  vs.  AUTOHOME INC A

REMEDY ENTERTAINMENT OYJ

Risk-Adjusted Performance

Very Weak

Over the last 90 days REMEDY ENTERTAINMENT OYJ has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, REMEDY ENTERTAINMENT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AUTOHOME INC A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AUTOHOME INC A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, AUTOHOME INC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with REMEDY ENTERTAINMENT and AUTOHOME INC

The main advantage of trading using opposite REMEDY ENTERTAINMENT and AUTOHOME INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT position performs unexpectedly, AUTOHOME INC 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 INC will offset losses from the drop in AUTOHOME INC's long position.

The idea behind REMEDY ENTERTAINMENT OYJ and AUTOHOME INC A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.