Correlation Between DoorDash, and Baidu

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

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

Diversification Opportunities for DoorDash, and Baidu

0.55

Correlation Coefficient

DoorDash,  Baidu

Very weak diversification

The 3 months correlation between DoorDash, and Baidu is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DoorDash, Class A and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and DoorDash, 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 DoorDash, Class A 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 DoorDash, i.e., DoorDash, and Baidu go up and down completely randomly.

Pair Corralation between DoorDash, and Baidu

Given the investment horizon of 90 days DoorDash, is expected to generate 2.02 times less return on investment than Baidu. But when comparing it to its historical volatility, DoorDash, Class A is 1.26 times less risky than Baidu. It trades about 0.06 of its potential returns per unit of risk. Baidu Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,405  in Baidu Inc on December 29, 2024 and sell it today you would earn a total of  1,437  from holding Baidu Inc or generate 17.1% return on investment over 90 days.

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

DoorDash, Class A  vs.  Baidu Inc

DoorDash, Class A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DoorDash, Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DoorDash, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Baidu Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baidu Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Baidu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DoorDash, and Baidu

The main advantage of trading using opposite DoorDash, and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DoorDash, 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 DoorDash, Class A 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.