Correlation Between Facebook and IQIYI
Can any of the company-specific risk be diversified away by investing in both Facebook 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 Facebook and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Facebook and iQIYI Inc, you can compare the effects of market volatilities on Facebook 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 Facebook with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Facebook and IQIYI.
Diversification Opportunities for Facebook and IQIYI
Pay attention - limited upside
The 3 months correlation between Facebook and IQIYI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Facebook and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Facebook 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 Facebook 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 Facebook i.e., Facebook and IQIYI go up and down completely randomly.
Pair Corralation between Facebook and IQIYI
If you would invest (100.00) in Facebook on November 2, 2024 and sell it today you would earn a total of 100.00 from holding Facebook or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Facebook vs. iQIYI Inc
Performance |
| Timeline |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| iQIYI Inc |
Facebook and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Facebook and IQIYI
The main advantage of trading using opposite Facebook and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Facebook 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.| Facebook vs. Meta Platforms | Facebook vs. Alphabet Inc Class A | Facebook vs. Twilio Inc | Facebook vs. Snap Inc |
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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