Correlation Between RSTN Old and Autohome

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

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

Diversification Opportunities for RSTN Old and Autohome

0.0

Correlation Coefficient

RSTN Old  Autohome

Pay attention - limited upside

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

Pair Corralation between RSTN Old and Autohome

If you would invest  2,502  in Autohome on December 28, 2024 and sell it today you would earn a total of  318.00  from holding Autohome or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

RSTN Old  vs.  Autohome

RSTN Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days RSTN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, RSTN Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Autohome

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autohome are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Autohome displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RSTN Old and Autohome

The main advantage of trading using opposite RSTN Old and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSTN Old 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 RSTN Old 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.