Correlation Between Venu Holding and IQIYI

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

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

Diversification Opportunities for Venu Holding and IQIYI

0.16

Correlation Coefficient

Venu Holding  IQIYI

Average diversification

The 3 months correlation between Venu and IQIYI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Venu Holding and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Venu Holding 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 Venu Holding 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 Venu Holding i.e., Venu Holding and IQIYI go up and down completely randomly.

Pair Corralation between Venu Holding and IQIYI

Given the investment horizon of 90 days Venu Holding is expected to generate 51.0 times more return on investment than IQIYI. However, Venu Holding is 51.0 times more volatile than iQIYI Inc. It trades about 0.19 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.04 per unit of risk. If you would invest  0.00  in Venu Holding on October 9, 2024 and sell it today you would earn a total of  1,000.00  from holding Venu Holding or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.45%
Values	Daily Returns

Venu Holding  vs.  iQIYI Inc

Venu Holding

Risk-Adjusted Performance

15 of 100

Good

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

iQIYI Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iQIYI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Venu Holding and IQIYI

The main advantage of trading using opposite Venu Holding and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Venu Holding 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 Venu Holding 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.