Correlation Between Baidu and Starbox Group
Can any of the company-specific risk be diversified away by investing in both Baidu and Starbox Group 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 Starbox Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and Starbox Group Holdings, you can compare the effects of market volatilities on Baidu and Starbox Group 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 Starbox Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and Starbox Group.
Diversification Opportunities for Baidu and Starbox Group
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baidu and Starbox is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and Starbox Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbox Group Holdings 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 Starbox Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbox Group Holdings has no effect on the direction of Baidu i.e., Baidu and Starbox Group go up and down completely randomly.
Pair Corralation between Baidu and Starbox Group
Given the investment horizon of 90 days Baidu Inc is expected to generate 0.38 times more return on investment than Starbox Group. However, Baidu Inc is 2.63 times less risky than Starbox Group. It trades about -0.01 of its potential returns per unit of risk. Starbox Group Holdings is currently generating about -0.06 per unit of risk. If you would invest 11,692 in Baidu Inc on August 24, 2024 and sell it today you would lose (3,659) from holding Baidu Inc or give up 31.29% 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. Starbox Group Holdings
Performance |
| Timeline |
| Baidu Inc |
| Starbox Group Holdings |
Baidu and Starbox Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and Starbox Group
The main advantage of trading using opposite Baidu and Starbox Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, Starbox Group 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 Starbox Group will offset losses from the drop in Starbox Group's long position.| Baidu vs. Tencent Music Entertainment | Baidu vs. Twilio Inc | Baidu vs. Spotify Technology SA | Baidu vs. Weibo Corp |
| Starbox Group vs. Twilio Inc | Starbox Group vs. Baidu Inc | Starbox Group vs. Snap Inc | Starbox Group vs. ANGI Homeservices |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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