Correlation Between IQIYI and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both IQIYI and Advantage Solutions 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 IQIYI and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Advantage Solutions, you can compare the effects of market volatilities on IQIYI and Advantage Solutions 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 IQIYI with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Advantage Solutions.
Diversification Opportunities for IQIYI and Advantage Solutions
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IQIYI and Advantage is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and IQIYI 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 iQIYI Inc are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of IQIYI i.e., IQIYI and Advantage Solutions go up and down completely randomly.
Pair Corralation between IQIYI and Advantage Solutions
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Advantage Solutions. In addition to that, IQIYI is 1.1 times more volatile than Advantage Solutions. It trades about 0.0 of its total potential returns per unit of risk. Advantage Solutions is currently generating about 0.05 per unit of volatility. If you would invest 215.00 in Advantage Solutions on August 24, 2024 and sell it today you would earn a total of 145.00 from holding Advantage Solutions or generate 67.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iQIYI Inc vs. Advantage Solutions
Performance |
| Timeline |
| iQIYI Inc |
| Advantage Solutions |
IQIYI and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Advantage Solutions
The main advantage of trading using opposite IQIYI and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.The idea behind iQIYI Inc and Advantage Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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