Correlation Between Sinclair Broadcast and IQIYI

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

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

Diversification Opportunities for Sinclair Broadcast and IQIYI

-0.14

Correlation Coefficient

Sinclair Broadcast  IQIYI

Good diversification

The 3 months correlation between Sinclair and IQIYI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Sinclair Broadcast 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 Sinclair Broadcast Group are associated (or correlated) with IQIYI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iQIYI Inc has no effect on the direction of Sinclair Broadcast i.e., Sinclair Broadcast and IQIYI go up and down completely randomly.

Pair Corralation between Sinclair Broadcast and IQIYI

Given the investment horizon of 90 days Sinclair Broadcast is expected to generate 5.22 times less return on investment than IQIYI. But when comparing it to its historical volatility, Sinclair Broadcast Group is 1.62 times less risky than IQIYI. It trades about 0.03 of its potential returns per unit of risk. iQIYI Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  202.00  in iQIYI Inc on December 29, 2024 and sell it today you would earn a total of  35.00  from holding iQIYI Inc or generate 17.33% return on investment over 90 days.

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

Sinclair Broadcast Group  vs.  iQIYI Inc

Sinclair Broadcast

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Sinclair Broadcast is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iQIYI Inc

Risk-Adjusted Performance

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.

Pair Trading with Sinclair Broadcast and IQIYI

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

The idea behind Sinclair Broadcast Group and iQIYI Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.