Correlation Between Aeris Indstria and Autohome

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

By analyzing existing cross correlation between Aeris Indstria e and Autohome, you can compare the effects of market volatilities on Aeris Indstria 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 Aeris Indstria with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Indstria and Autohome.

Diversification Opportunities for Aeris Indstria and Autohome

-0.56

Correlation Coefficient

Aeris Indstria  Autohome

Excellent diversification

The 3 months correlation between Aeris and Autohome is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Aeris Indstria 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 Aeris Indstria e 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 Aeris Indstria i.e., Aeris Indstria and Autohome go up and down completely randomly.

Pair Corralation between Aeris Indstria and Autohome

Assuming the 90 days trading horizon Aeris Indstria e is expected to under-perform the Autohome. In addition to that, Aeris Indstria is 2.32 times more volatile than Autohome. It trades about -0.5 of its total potential returns per unit of risk. Autohome is currently generating about 0.19 per unit of volatility. If you would invest  1,603  in Autohome on December 5, 2024 and sell it today you would earn a total of  87.00  from holding Autohome or generate 5.43% return on investment over 90 days.

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

Aeris Indstria e  vs.  Autohome

Aeris Indstria e

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Indstria e are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aeris Indstria unveiled solid returns over the last few months and may actually be approaching a breakup point.

Autohome

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Autohome are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Autohome is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aeris Indstria and Autohome

The main advantage of trading using opposite Aeris Indstria and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria 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.

The idea behind Aeris Indstria e and Autohome 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.