Correlation Between ATOSS SOFTWARE and Autohome

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

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

Diversification Opportunities for ATOSS SOFTWARE and Autohome

0.74

Correlation Coefficient

ATOSS SOFTWARE  Autohome

Poor diversification

The 3 months correlation between ATOSS and Autohome is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ATOSS SOFTWARE and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and ATOSS 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 ATOSS 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 ADR has no effect on the direction of ATOSS SOFTWARE i.e., ATOSS SOFTWARE and Autohome go up and down completely randomly.

Pair Corralation between ATOSS SOFTWARE and Autohome

Assuming the 90 days trading horizon ATOSS SOFTWARE is expected to generate 0.88 times more return on investment than Autohome. However, ATOSS SOFTWARE is 1.14 times less risky than Autohome. It trades about 0.03 of its potential returns per unit of risk. Autohome ADR is currently generating about 0.0 per unit of risk. If you would invest  10,078  in ATOSS SOFTWARE on October 5, 2024 and sell it today you would earn a total of  1,382  from holding ATOSS SOFTWARE or generate 13.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

ATOSS SOFTWARE  vs.  Autohome ADR

ATOSS SOFTWARE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATOSS SOFTWARE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Autohome ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohome ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ATOSS SOFTWARE and Autohome

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

The idea behind ATOSS SOFTWARE and Autohome ADR 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.