Correlation Between IQIYI and Chindata Group

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

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

Diversification Opportunities for IQIYI and Chindata Group

-0.51

Correlation Coefficient

IQIYI  Chindata Group

Excellent diversification

The 3 months correlation between IQIYI and Chindata is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings 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 Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of IQIYI i.e., IQIYI and Chindata Group go up and down completely randomly.

Pair Corralation between IQIYI and Chindata Group

If you would invest  790.00  in Chindata Group Holdings on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Chindata Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.53%
Values	Daily Returns

iQIYI Inc  vs.  Chindata Group Holdings

iQIYI Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iQIYI Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IQIYI is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IQIYI and Chindata Group

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

The idea behind iQIYI Inc and Chindata Group Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.