Correlation Between Gaia and IQIYI

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Gaia 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 Gaia and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaia Inc and IQIYI Inc, you can compare the effects of market volatilities on Gaia 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 Gaia with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaia and IQIYI.

Diversification Opportunities for Gaia and IQIYI

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Gaia and IQIYI is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gaia Inc and IQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQIYI Inc and Gaia 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 Gaia Inc 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 Gaia i.e., Gaia and IQIYI go up and down completely randomly.

Pair Corralation between Gaia and IQIYI

Given the investment horizon of 90 days Gaia is expected to generate 1.92 times less return on investment than IQIYI. But when comparing it to its historical volatility, Gaia Inc is 1.92 times less risky than IQIYI. It trades about 0.2 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 Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gaia Inc  vs.  IQIYI Inc

 Performance 
       Timeline  
Gaia Inc 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gaia Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal forward indicators, Gaia sustained solid returns over the last few months and may actually be approaching a breakup point.
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 abnormal 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.

Gaia and IQIYI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gaia and IQIYI

The main advantage of trading using opposite Gaia and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaia 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 Gaia Inc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity