Correlation Between Baidu and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Baidu and ANGI Homeservices 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 ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and ANGI Homeservices, you can compare the effects of market volatilities on Baidu and ANGI Homeservices 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 ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and ANGI Homeservices.
Diversification Opportunities for Baidu and ANGI Homeservices
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baidu and ANGI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices 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 ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Baidu i.e., Baidu and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Baidu and ANGI Homeservices
Given the investment horizon of 90 days Baidu is expected to generate 1.39 times less return on investment than ANGI Homeservices. But when comparing it to its historical volatility, Baidu Inc is 1.03 times less risky than ANGI Homeservices. It trades about 0.15 of its potential returns per unit of risk. ANGI Homeservices is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 157.00 in ANGI Homeservices on November 9, 2024 and sell it today you would earn a total of 21.00 from holding ANGI Homeservices or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baidu Inc vs. ANGI Homeservices
Performance |
| Timeline |
| Baidu Inc |
| ANGI Homeservices |
Baidu and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and ANGI Homeservices
The main advantage of trading using opposite Baidu and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.| Baidu vs. Tencent Music Entertainment | Baidu vs. Twilio Inc | Baidu vs. Spotify Technology SA | Baidu vs. Weibo Corp |
| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc Class |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |