Correlation Between IQIYI and AAC Clyde

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

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

Diversification Opportunities for IQIYI and AAC Clyde

-0.61

Correlation Coefficient

IQIYI  AAC Clyde

Excellent diversification

The 3 months correlation between IQIYI and AAC is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space and IQIYI 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 iQIYI Inc are associated (or correlated) with AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of IQIYI i.e., IQIYI and AAC Clyde go up and down completely randomly.

Pair Corralation between IQIYI and AAC Clyde

Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 12.06 times more return on investment than AAC Clyde. However, IQIYI is 12.06 times more volatile than AAC Clyde Space. It trades about 0.08 of its potential returns per unit of risk. AAC Clyde Space is currently generating about -0.14 per unit of risk. If you would invest  214.00  in iQIYI Inc on September 16, 2024 and sell it today you would earn a total of  13.00  from holding iQIYI Inc or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

iQIYI Inc  vs.  AAC Clyde Space

iQIYI Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iQIYI Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, IQIYI reported solid returns over the last few months and may actually be approaching a breakup point.

AAC Clyde Space

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AAC Clyde Space are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, AAC Clyde reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQIYI and AAC Clyde

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

The idea behind iQIYI Inc and AAC Clyde Space 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.