Correlation Between Mliuz SA and Baidu

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

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

Diversification Opportunities for Mliuz SA and Baidu

0.08

Correlation Coefficient

Mliuz SA  Baidu

Significant diversification

The 3 months correlation between Mliuz and Baidu is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mliuz SA and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and Mliuz SA 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 Mliuz SA are associated (or correlated) with Baidu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baidu Inc has no effect on the direction of Mliuz SA i.e., Mliuz SA and Baidu go up and down completely randomly.

Pair Corralation between Mliuz SA and Baidu

Assuming the 90 days trading horizon Mliuz SA is expected to generate 2.41 times more return on investment than Baidu. However, Mliuz SA is 2.41 times more volatile than Baidu Inc. It trades about 0.01 of its potential returns per unit of risk. Baidu Inc is currently generating about 0.01 per unit of risk. If you would invest  345.00  in Mliuz SA on September 24, 2024 and sell it today you would lose (66.00) from holding Mliuz SA or give up 19.13% of portfolio value over 90 days.

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

Mliuz SA  vs.  Baidu Inc

Mliuz SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mliuz SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Baidu Inc

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Baidu Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Baidu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mliuz SA and Baidu

The main advantage of trading using opposite Mliuz SA and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mliuz SA position performs unexpectedly, Baidu 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 Baidu will offset losses from the drop in Baidu's long position.

The idea behind Mliuz SA and Baidu Inc 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.