Correlation Between Taboola and Baidu

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

By analyzing existing cross correlation between Taboola Ltd Warrant and Baidu Inc, you can compare the effects of market volatilities on Taboola and Baidu 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 Taboola with a short position of Baidu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taboola and Baidu.

Diversification Opportunities for Taboola and Baidu

-0.44

Correlation Coefficient

Taboola  Baidu

Very good diversification

The 3 months correlation between Taboola and Baidu is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Taboola Ltd Warrant and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and Taboola 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 Taboola Ltd Warrant are associated (or correlated) with Baidu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baidu Inc has no effect on the direction of Taboola i.e., Taboola and Baidu go up and down completely randomly.

Pair Corralation between Taboola and Baidu

Assuming the 90 days horizon Taboola Ltd Warrant is expected to generate 4.37 times more return on investment than Baidu. However, Taboola is 4.37 times more volatile than Baidu Inc. It trades about 0.05 of its potential returns per unit of risk. Baidu Inc is currently generating about -0.02 per unit of risk. If you would invest  54.00  in Taboola Ltd Warrant on October 3, 2024 and sell it today you would lose (22.00) from holding Taboola Ltd Warrant or give up 40.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.28%
Values	Daily Returns

Taboola Ltd Warrant  vs.  Baidu Inc

Taboola Warrant

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Taboola Ltd Warrant are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Taboola showed solid returns over the last few months and may actually be approaching a breakup point.

Baidu Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baidu Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Taboola and Baidu

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

The idea behind Taboola Ltd Warrant and Baidu 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.