Correlation Between KonaTel and Autohome

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

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

Diversification Opportunities for KonaTel and Autohome

0.7

Correlation Coefficient

KonaTel  Autohome

Poor diversification

The 3 months correlation between KonaTel and Autohome is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding KonaTel and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and KonaTel 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 KonaTel 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 KonaTel i.e., KonaTel and Autohome go up and down completely randomly.

Pair Corralation between KonaTel and Autohome

Given the investment horizon of 90 days KonaTel is expected to under-perform the Autohome. In addition to that, KonaTel is 4.57 times more volatile than Autohome. It trades about -0.05 of its total potential returns per unit of risk. Autohome is currently generating about -0.15 per unit of volatility. If you would invest  3,262  in Autohome on September 29, 2024 and sell it today you would lose (608.00) from holding Autohome or give up 18.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

KonaTel  vs.  Autohome

KonaTel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KonaTel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional 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. In spite of weak performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with KonaTel and Autohome

The main advantage of trading using opposite KonaTel and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KonaTel 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 KonaTel 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.