Correlation Between Baidu and QURATE RETAIL
Can any of the company-specific risk be diversified away by investing in both Baidu and QURATE RETAIL 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 Baidu and QURATE RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and QURATE RETAIL INC, you can compare the effects of market volatilities on Baidu and QURATE RETAIL 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 Baidu with a short position of QURATE RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and QURATE RETAIL.
Diversification Opportunities for Baidu and QURATE RETAIL
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baidu and QURATE is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC and Baidu 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 Baidu Inc are associated (or correlated) with QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of Baidu i.e., Baidu and QURATE RETAIL go up and down completely randomly.
Pair Corralation between Baidu and QURATE RETAIL
Assuming the 90 days horizon Baidu Inc is expected to generate 0.67 times more return on investment than QURATE RETAIL. However, Baidu Inc is 1.49 times less risky than QURATE RETAIL. It trades about -0.06 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about -0.04 per unit of risk. If you would invest 10,440 in Baidu Inc on September 3, 2024 and sell it today you would lose (2,330) from holding Baidu Inc or give up 22.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baidu Inc vs. QURATE RETAIL INC
Performance |
| Timeline |
| Baidu Inc |
| QURATE RETAIL INC |
Baidu and QURATE RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and QURATE RETAIL
The main advantage of trading using opposite Baidu and QURATE RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, QURATE RETAIL 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 QURATE RETAIL will offset losses from the drop in QURATE RETAIL's long position.| Baidu vs. Alphabet Class A | Baidu vs. Meta Platforms | Baidu vs. Meta Platforms | Baidu vs. Tencent Holdings |
| QURATE RETAIL vs. DICKS Sporting Goods | QURATE RETAIL vs. YATRA ONLINE DL 0001 | QURATE RETAIL vs. SALESFORCE INC CDR | QURATE RETAIL vs. COLUMBIA SPORTSWEAR |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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