Correlation Between Core Main and IQIYI
Can any of the company-specific risk be diversified away by investing in both Core Main and IQIYI 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 Core Main and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Main and iQIYI Inc, you can compare the effects of market volatilities on Core Main and IQIYI 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 Core Main with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Main and IQIYI.
Diversification Opportunities for Core Main and IQIYI
Modest diversification
The 3 months correlation between Core and IQIYI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Core Main and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Core Main 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 Core Main are associated (or correlated) with IQIYI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iQIYI Inc has no effect on the direction of Core Main i.e., Core Main and IQIYI go up and down completely randomly.
Pair Corralation between Core Main and IQIYI
Considering the 90-day investment horizon Core Main is expected to generate 0.7 times more return on investment than IQIYI. However, Core Main is 1.42 times less risky than IQIYI. It trades about -0.03 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.12 per unit of risk. If you would invest 5,609 in Core Main on August 30, 2024 and sell it today you would lose (898.00) from holding Core Main or give up 16.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Core Main vs. iQIYI Inc
Performance |
| Timeline |
| Core Main |
| iQIYI Inc |
Core Main and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Core Main and IQIYI
The main advantage of trading using opposite Core Main and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Main position performs unexpectedly, IQIYI 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 IQIYI will offset losses from the drop in IQIYI's long position.| Core Main vs. DXP Enterprises | Core Main vs. Watsco Inc | Core Main vs. Distribution Solutions Group | Core Main vs. SiteOne Landscape Supply |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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