Correlation Between Charter Communications and Autohome
Can any of the company-specific risk be diversified away by investing in both Charter Communications 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 Charter Communications and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charter Communications and Autohome, you can compare the effects of market volatilities on Charter Communications 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 Charter Communications with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charter Communications and Autohome.
Diversification Opportunities for Charter Communications and Autohome
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charter and Autohome is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Charter Communications and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Charter Communications 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 Charter Communications 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 Charter Communications i.e., Charter Communications and Autohome go up and down completely randomly.
Pair Corralation between Charter Communications and Autohome
Assuming the 90 days trading horizon Charter Communications is expected to generate 1.22 times more return on investment than Autohome. However, Charter Communications is 1.22 times more volatile than Autohome. It trades about 0.2 of its potential returns per unit of risk. Autohome is currently generating about 0.08 per unit of risk. If you would invest 3,049 in Charter Communications on September 10, 2024 and sell it today you would earn a total of 1,062 from holding Charter Communications or generate 34.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Charter Communications vs. Autohome
Performance |
Timeline |
Charter Communications |
Autohome |
Charter Communications and Autohome Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Charter Communications and Autohome
The main advantage of trading using opposite Charter Communications and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charter Communications 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.Charter Communications vs. Warner Music Group | Charter Communications vs. Bemobi Mobile Tech | Charter Communications vs. LIFE CAPITAL PARTNERS | Charter Communications vs. EOG Resources |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |