Correlation Between IQIYI and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both IQIYI and Meta Platforms 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 IQIYI and Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Meta Platforms, you can compare the effects of market volatilities on IQIYI and Meta Platforms 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 IQIYI with a short position of Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Meta Platforms.
Diversification Opportunities for IQIYI and Meta Platforms
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IQIYI and Meta is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and IQIYI 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 iQIYI Inc are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of IQIYI i.e., IQIYI and Meta Platforms go up and down completely randomly.
Pair Corralation between IQIYI and Meta Platforms
Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 1.37 times more return on investment than Meta Platforms. However, IQIYI is 1.37 times more volatile than Meta Platforms. It trades about 0.03 of its potential returns per unit of risk. Meta Platforms is currently generating about -0.09 per unit of risk. If you would invest 356.00 in iQIYI Inc on January 19, 2024 and sell it today you would earn a total of 64.00 from holding iQIYI Inc or generate 17.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 8.28% |
Values | Daily Returns |
iQIYI Inc vs. Meta Platforms
Performance |
Timeline |
iQIYI Inc |
Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IQIYI and Meta Platforms Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IQIYI and Meta Platforms
The main advantage of trading using opposite IQIYI and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.IQIYI vs. Roku Inc | IQIYI vs. Paramount Global Class | IQIYI vs. Warner Bros Discovery | IQIYI vs. Paramount Global Class |
Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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