Correlation Between CARYSIL and Autohome

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

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

Diversification Opportunities for CARYSIL and Autohome

0.46

Correlation Coefficient

CARYSIL  Autohome

Very weak diversification

The 3 months correlation between CARYSIL and Autohome is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CARYSIL LIMITED and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and CARYSIL 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 CARYSIL LIMITED 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 CARYSIL i.e., CARYSIL and Autohome go up and down completely randomly.

Pair Corralation between CARYSIL and Autohome

Assuming the 90 days trading horizon CARYSIL LIMITED is expected to under-perform the Autohome. But the stock apears to be less risky and, when comparing its historical volatility, CARYSIL LIMITED is 1.32 times less risky than Autohome. The stock trades about -0.13 of its potential returns per unit of risk. The Autohome is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,662  in Autohome on February 7, 2024 and sell it today you would earn a total of  40.00  from holding Autohome or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

CARYSIL LIMITED  vs.  Autohome

CARYSIL LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CARYSIL LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Autohome

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Autohome are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Autohome is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CARYSIL and Autohome

The main advantage of trading using opposite CARYSIL and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARYSIL 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 CARYSIL LIMITED 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.