Correlation Between IQIYI and Cheer Holding
Can any of the company-specific risk be diversified away by investing in both IQIYI and Cheer Holding 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 Cheer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Cheer Holding, you can compare the effects of market volatilities on IQIYI and Cheer Holding 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 Cheer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Cheer Holding.
Diversification Opportunities for IQIYI and Cheer Holding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IQIYI and Cheer is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding 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 Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of IQIYI i.e., IQIYI and Cheer Holding go up and down completely randomly.
Pair Corralation between IQIYI and Cheer Holding
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Cheer Holding. In addition to that, IQIYI is 2.07 times more volatile than Cheer Holding. It trades about -0.25 of its total potential returns per unit of risk. Cheer Holding is currently generating about -0.39 per unit of volatility. If you would invest 302.00 in Cheer Holding on August 24, 2024 and sell it today you would lose (46.00) from holding Cheer Holding or give up 15.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iQIYI Inc vs. Cheer Holding
Performance |
| Timeline |
| iQIYI Inc |
| Cheer Holding |
IQIYI and Cheer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Cheer Holding
The main advantage of trading using opposite IQIYI and Cheer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Cheer Holding 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 Cheer Holding will offset losses from the drop in Cheer Holding's long position.| IQIYI vs. Roku Inc | IQIYI vs. AMC Entertainment Holdings | IQIYI vs. Paramount Global Class | IQIYI vs. Warner Bros Discovery |
| Cheer Holding vs. First Ship Lease | Cheer Holding vs. Tarsus Pharmaceuticals | Cheer Holding vs. Inhibrx | Cheer Holding vs. Abcellera Biologics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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