Correlation Between Baidu and Yunji
Can any of the company-specific risk be diversified away by investing in both Baidu and Yunji 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 Yunji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and Yunji Inc, you can compare the effects of market volatilities on Baidu and Yunji 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 Yunji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and Yunji.
Diversification Opportunities for Baidu and Yunji
Poor diversification
The 3 months correlation between Baidu and Yunji is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and Yunji Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunji 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 Yunji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunji Inc has no effect on the direction of Baidu i.e., Baidu and Yunji go up and down completely randomly.
Pair Corralation between Baidu and Yunji
Given the investment horizon of 90 days Baidu is expected to generate 3.77 times less return on investment than Yunji. But when comparing it to its historical volatility, Baidu Inc is 3.9 times less risky than Yunji. It trades about 0.11 of its potential returns per unit of risk. Yunji Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Yunji Inc on September 19, 2024 and sell it today you would earn a total of 22.00 from holding Yunji Inc or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baidu Inc vs. Yunji Inc
Performance |
| Timeline |
| Baidu Inc |
| Yunji Inc |
Baidu and Yunji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and Yunji
The main advantage of trading using opposite Baidu and Yunji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, Yunji 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 Yunji will offset losses from the drop in Yunji's long position.| Baidu vs. Tencent Music Entertainment | Baidu vs. Twilio Inc | Baidu vs. Spotify Technology SA | Baidu vs. Weibo Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Positions Ratings 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 | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |