Correlation Between G2D Investments and Autohome

Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and Autohome into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G2D Investments and Autohome, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Autohome.

Diversification Opportunities for G2D Investments and Autohome

0.5

Correlation Coefficient

G2D Investments  Autohome

Very weak diversification

The 3 months correlation between G2D and Autohome is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and Autohome go up and down completely randomly.

Pair Corralation between G2D Investments and Autohome

Assuming the 90 days trading horizon G2D Investments is expected to generate 1.45 times more return on investment than Autohome. However, G2D Investments is 1.45 times more volatile than Autohome. It trades about 0.08 of its potential returns per unit of risk. Autohome is currently generating about 0.07 per unit of risk. If you would invest  152.00  in G2D Investments on March 28, 2025 and sell it today you would earn a total of  4.00  from holding G2D Investments or generate 2.63% return on investment over 90 days.

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

G2D Investments  vs.  Autohome

G2D Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days G2D Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Autohome

Risk-Adjusted Performance

Very Weak

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

Pair Trading with G2D Investments and Autohome

The main advantage of trading using opposite G2D Investments and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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 G2D Investments 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.