Correlation Between GLOBUS MEDICAL and Autohome ADR
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
GLOBUS MEDICAL A vs. Autohome ADR
Performance |
Timeline |
GLOBUS MEDICAL A |
Autohome ADR |
GLOBUS MEDICAL and Autohome ADR Volatility Contrast
Predicted Return Density |
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.GLOBUS MEDICAL vs. Apple Inc | ||
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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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