Correlation Between Dupont De and IQIYI

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Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and IQIYI Inc, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and IQIYI.

Diversification Opportunities for Dupont De and IQIYI

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Dupont and IQIYI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and IQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQIYI Inc and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and IQIYI go up and down completely randomly.

Pair Corralation between Dupont De and IQIYI

Allowing for the 90-day total investment horizon Dupont De is expected to generate 1.6 times less return on investment than IQIYI. But when comparing it to its historical volatility, Dupont De Nemours is 4.35 times less risky than IQIYI. It trades about 0.54 of its potential returns per unit of risk. IQIYI Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  367.00  in IQIYI Inc on December 30, 2023 and sell it today you would earn a total of  56.00  from holding IQIYI Inc or generate 15.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Dupont De Nemours  vs.  IQIYI Inc

 Performance 
       Timeline  
Dupont De Nemours 

Risk-Adjusted Performance

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Low
 
High
Weak
Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dupont De is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
IQIYI Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Dupont De and IQIYI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dupont De and IQIYI

The main advantage of trading using opposite Dupont De and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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 Dupont De Nemours 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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