Correlation Between IQIYI and Arcadis NV

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

By analyzing existing cross correlation between iQIYI Inc and Arcadis NV, you can compare the effects of market volatilities on IQIYI and Arcadis NV 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 Arcadis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Arcadis NV.

Diversification Opportunities for IQIYI and Arcadis NV

0.17

Correlation Coefficient

IQIYI  Arcadis NV

Average diversification

The 3 months correlation between IQIYI and Arcadis is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Arcadis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadis NV 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 Arcadis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadis NV has no effect on the direction of IQIYI i.e., IQIYI and Arcadis NV go up and down completely randomly.

Pair Corralation between IQIYI and Arcadis NV

Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 4.57 times more return on investment than Arcadis NV. However, IQIYI is 4.57 times more volatile than Arcadis NV. It trades about -0.02 of its potential returns per unit of risk. Arcadis NV is currently generating about -0.21 per unit of risk. If you would invest  253.00  in iQIYI Inc on September 13, 2024 and sell it today you would lose (20.00) from holding iQIYI Inc or give up 7.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

iQIYI Inc  vs.  Arcadis NV

iQIYI Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iQIYI Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IQIYI reported solid returns over the last few months and may actually be approaching a breakup point.

Arcadis NV

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IQIYI and Arcadis NV

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

The idea behind iQIYI Inc and Arcadis NV 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.