Correlation Between IQIYI and QuinStreet

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

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

Diversification Opportunities for IQIYI and QuinStreet

-0.31

Correlation Coefficient

IQIYI  QuinStreet

Very good diversification

The 3 months correlation between IQIYI and QuinStreet is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and QuinStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QuinStreet 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 QuinStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QuinStreet has no effect on the direction of IQIYI i.e., IQIYI and QuinStreet go up and down completely randomly.

Pair Corralation between IQIYI and QuinStreet

Allowing for the 90-day total investment horizon IQIYI is expected to generate 2.31 times less return on investment than QuinStreet. In addition to that, IQIYI is 1.52 times more volatile than QuinStreet. It trades about 0.03 of its total potential returns per unit of risk. QuinStreet is currently generating about 0.12 per unit of volatility. If you would invest  1,855  in QuinStreet on September 1, 2024 and sell it today you would earn a total of  423.00  from holding QuinStreet or generate 22.8% return on investment over 90 days.

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

iQIYI Inc  vs.  QuinStreet

iQIYI Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iQIYI Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IQIYI may actually be approaching a critical reversion point that can send shares even higher in December 2024.

QuinStreet

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuinStreet are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, QuinStreet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQIYI and QuinStreet

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

The idea behind iQIYI Inc and QuinStreet 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.