Correlation Between Baidu and MoneyHero Limited
Can any of the company-specific risk be diversified away by investing in both Baidu and MoneyHero Limited 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 MoneyHero Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and MoneyHero Limited Class, you can compare the effects of market volatilities on Baidu and MoneyHero Limited 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 MoneyHero Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and MoneyHero Limited.
Diversification Opportunities for Baidu and MoneyHero Limited
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Baidu and MoneyHero is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and MoneyHero Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyHero Limited Class 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 MoneyHero Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyHero Limited Class has no effect on the direction of Baidu i.e., Baidu and MoneyHero Limited go up and down completely randomly.
Pair Corralation between Baidu and MoneyHero Limited
Given the investment horizon of 90 days Baidu Inc is expected to under-perform the MoneyHero Limited. But the stock apears to be less risky and, when comparing its historical volatility, Baidu Inc is 1.62 times less risky than MoneyHero Limited. The stock trades about -0.18 of its potential returns per unit of risk. The MoneyHero Limited Class is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 121.00 in MoneyHero Limited Class on August 30, 2024 and sell it today you would lose (5.00) from holding MoneyHero Limited Class or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baidu Inc vs. MoneyHero Limited Class
Performance |
| Timeline |
| Baidu Inc |
| MoneyHero Limited Class |
Baidu and MoneyHero Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and MoneyHero Limited
The main advantage of trading using opposite Baidu and MoneyHero Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, MoneyHero Limited 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 MoneyHero Limited will offset losses from the drop in MoneyHero Limited's long position.| Baidu vs. Tencent Music Entertainment | Baidu vs. Twilio Inc | Baidu vs. Spotify Technology SA | Baidu vs. Weibo Corp |
| MoneyHero Limited vs. Hf Foods Group | MoneyHero Limited vs. Universal Music Group | MoneyHero Limited vs. Sligro Food Group | MoneyHero Limited vs. Village Super Market |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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