Correlation Between Applied Digital and Autohome
Can any of the company-specific risk be diversified away by investing in both Applied Digital 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 Applied Digital and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Digital and Autohome, you can compare the effects of market volatilities on Applied Digital 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 Applied Digital with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and Autohome.
Diversification Opportunities for Applied Digital and Autohome
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Autohome is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Applied Digital 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 Applied Digital 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 Applied Digital i.e., Applied Digital and Autohome go up and down completely randomly.
Pair Corralation between Applied Digital and Autohome
Given the investment horizon of 90 days Applied Digital is expected to under-perform the Autohome. In addition to that, Applied Digital is 3.76 times more volatile than Autohome. It trades about 0.0 of its total potential returns per unit of risk. Autohome is currently generating about 0.06 per unit of volatility. If you would invest 2,703 in Autohome on December 2, 2024 and sell it today you would earn a total of 171.00 from holding Autohome or generate 6.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Applied Digital vs. Autohome
Performance |
Timeline |
Applied Digital |
Autohome |
Applied Digital and Autohome Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Digital and Autohome
The main advantage of trading using opposite Applied Digital and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Digital 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.Applied Digital vs. Magic Empire Global | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Netcapital | Applied Digital vs. Lazard |
Autohome vs. Hello Group | Autohome vs. Weibo Corp | Autohome vs. Tencent Music Entertainment | Autohome vs. DouYu International Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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