Correlation Between IQIYI and Green Impact
Can any of the company-specific risk be diversified away by investing in both IQIYI and Green Impact 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 Green Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Green Impact Partners, you can compare the effects of market volatilities on IQIYI and Green Impact 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 Green Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Green Impact.
Diversification Opportunities for IQIYI and Green Impact
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between IQIYI and Green is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Green Impact Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Impact Partners 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 Green Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Impact Partners has no effect on the direction of IQIYI i.e., IQIYI and Green Impact go up and down completely randomly.
Pair Corralation between IQIYI and Green Impact
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Green Impact. But the stock apears to be less risky and, when comparing its historical volatility, iQIYI Inc is 1.25 times less risky than Green Impact. The stock trades about -0.17 of its potential returns per unit of risk. The Green Impact Partners is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Green Impact Partners on October 22, 2024 and sell it today you would earn a total of 11.00 from holding Green Impact Partners or generate 4.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.0% |
Values | Daily Returns |
iQIYI Inc vs. Green Impact Partners
Performance |
Timeline |
iQIYI Inc |
Green Impact Partners |
IQIYI and Green Impact Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IQIYI and Green Impact
The main advantage of trading using opposite IQIYI and Green Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Green Impact 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 Green Impact will offset losses from the drop in Green Impact's long position.The idea behind iQIYI Inc and Green Impact Partners 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.Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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