Correlation Between IQIYI and Chindata Group
Can any of the company-specific risk be diversified away by investing in both IQIYI and Chindata 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 IQIYI and Chindata Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Chindata Group Holdings, you can compare the effects of market volatilities on IQIYI and Chindata 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 IQIYI with a short position of Chindata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Chindata Group.
Diversification Opportunities for IQIYI and Chindata Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IQIYI and Chindata is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings 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 Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of IQIYI i.e., IQIYI and Chindata Group go up and down completely randomly.
Pair Corralation between IQIYI and Chindata Group
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Chindata Group. In addition to that, IQIYI is 1.18 times more volatile than Chindata Group Holdings. It trades about 0.0 of its total potential returns per unit of risk. Chindata Group Holdings is currently generating about 0.02 per unit of volatility. If you would invest 772.00 in Chindata Group Holdings on September 5, 2024 and sell it today you would earn a total of 18.00 from holding Chindata Group Holdings or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.51% |
| Values | Daily Returns |
iQIYI Inc vs. Chindata Group Holdings
Performance |
| Timeline |
| iQIYI Inc |
| Chindata Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IQIYI and Chindata Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Chindata Group
The main advantage of trading using opposite IQIYI and Chindata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Chindata 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 Chindata Group will offset losses from the drop in Chindata Group's long position.The idea behind iQIYI Inc and Chindata Group Holdings 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.| Chindata Group vs. GDS Holdings | Chindata Group vs. ExlService Holdings | Chindata Group vs. Gartner | Chindata Group vs. VNET Group DRC |
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.
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