Correlation Between Huntington Ingalls and Autohome

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

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

Diversification Opportunities for Huntington Ingalls and Autohome

0.0

Correlation Coefficient

Huntington Ingalls  Autohome

Pay attention - limited upside

The 3 months correlation between Huntington and Autohome is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Huntington Ingalls Industries, and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Huntington Ingalls 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 Huntington Ingalls Industries, 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 Huntington Ingalls i.e., Huntington Ingalls and Autohome go up and down completely randomly.

Pair Corralation between Huntington Ingalls and Autohome

If you would invest  1,444  in Autohome on October 9, 2024 and sell it today you would earn a total of  161.00  from holding Autohome or generate 11.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.61%
Values	Daily Returns

Huntington Ingalls Industries,  vs.  Autohome

Huntington Ingalls

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huntington Ingalls Industries, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Huntington Ingalls is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Autohome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autohome has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Autohome is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Huntington Ingalls and Autohome

The main advantage of trading using opposite Huntington Ingalls and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntington Ingalls 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 Huntington Ingalls Industries, and Autohome 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.