Correlation Between Baozun and Autohome

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

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

Diversification Opportunities for Baozun and Autohome

-0.23

Correlation Coefficient

Baozun  Autohome

Very good diversification

The 3 months correlation between Baozun and Autohome is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Baozun Inc and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and Baozun 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 Baozun Inc 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 Baozun i.e., Baozun and Autohome go up and down completely randomly.

Pair Corralation between Baozun and Autohome

Given the investment horizon of 90 days Baozun Inc is expected to under-perform the Autohome. In addition to that, Baozun is 2.51 times more volatile than Autohome. It trades about -0.08 of its total potential returns per unit of risk. Autohome is currently generating about 0.1 per unit of volatility. If you would invest  2,563  in Autohome on May 7, 2025 and sell it today you would earn a total of  215.00  from holding Autohome or generate 8.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Baozun Inc  vs.  Autohome

Baozun Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baozun Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Autohome

Risk-Adjusted Performance

Insignificant

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 may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Baozun and Autohome

The main advantage of trading using opposite Baozun and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baozun 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 Baozun Inc 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.