Correlation Between GLOBUS MEDICAL and Autohome ADR

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Can any of the company-specific risk be diversified away by investing in both GLOBUS MEDICAL and Autohome ADR 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 GLOBUS MEDICAL and Autohome ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBUS MEDICAL A and Autohome ADR, you can compare the effects of market volatilities on GLOBUS MEDICAL and Autohome ADR 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 GLOBUS MEDICAL with a short position of Autohome ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBUS MEDICAL and Autohome ADR.

Diversification Opportunities for GLOBUS MEDICAL and Autohome ADR

GLOBUSAutohomeDiversified AwayGLOBUSAutohomeDiversified Away100%
0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between GLOBUS and Autohome is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding GLOBUS MEDICAL A and Autohome ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome ADR and GLOBUS MEDICAL 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 GLOBUS MEDICAL A are associated (or correlated) with Autohome ADR. 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 GLOBUS MEDICAL i.e., GLOBUS MEDICAL and Autohome ADR go up and down completely randomly.

Pair Corralation between GLOBUS MEDICAL and Autohome ADR

Assuming the 90 days trading horizon GLOBUS MEDICAL A is expected to generate 0.8 times more return on investment than Autohome ADR. However, GLOBUS MEDICAL A is 1.26 times less risky than Autohome ADR. 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  7,150  in GLOBUS MEDICAL A on October 31, 2024 and sell it today you would earn a total of  1,600  from holding GLOBUS MEDICAL A or generate 22.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

GLOBUS MEDICAL A  vs.  Autohome ADR

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -100102030
JavaScript chart by amCharts 3.21.15GM0N 8AHB
       Timeline  
GLOBUS MEDICAL A 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GLOBUS MEDICAL A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GLOBUS MEDICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan70758085
Autohome ADR 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Autohome ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Autohome ADR may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2323.52424.52525.52626.5

GLOBUS MEDICAL and Autohome ADR Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.04-5.27-3.51-1.740.01.873.815.747.689.61 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15GM0N 8AHB
       Returns  

Pair Trading with GLOBUS MEDICAL and Autohome ADR

The main advantage of trading using opposite GLOBUS MEDICAL and Autohome ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBUS MEDICAL position performs unexpectedly, Autohome ADR 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 ADR will offset losses from the drop in Autohome ADR's long position.
The idea behind GLOBUS MEDICAL A 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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