Correlation Between MAHLE Metal and Autohome

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

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

Diversification Opportunities for MAHLE Metal and Autohome

-0.68

Correlation Coefficient

MAHLE Metal  Autohome

Excellent diversification

The 3 months correlation between MAHLE and Autohome is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Autohome go up and down completely randomly.

Pair Corralation between MAHLE Metal and Autohome

Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Autohome. In addition to that, MAHLE Metal is 1.05 times more volatile than Autohome. It trades about -0.02 of its total potential returns per unit of risk. Autohome is currently generating about -0.02 per unit of volatility. If you would invest  1,570  in Autohome on April 24, 2025 and sell it today you would lose (32.00) from holding Autohome or give up 2.04% of portfolio value over 90 days.

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

MAHLE Metal Leve  vs.  Autohome

MAHLE Metal Leve

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MAHLE Metal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private 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 somewhat strong basic indicators, Autohome is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MAHLE Metal and Autohome

The main advantage of trading using opposite MAHLE Metal and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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 MAHLE Metal Leve 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.