Correlation Between IQIYI and Fangdd Network
Can any of the company-specific risk be diversified away by investing in both IQIYI and Fangdd Network 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 Fangdd Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Fangdd Network Group, you can compare the effects of market volatilities on IQIYI and Fangdd Network 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 Fangdd Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Fangdd Network.
Diversification Opportunities for IQIYI and Fangdd Network
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IQIYI and Fangdd is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Fangdd Network Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangdd Network Group 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 Fangdd Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangdd Network Group has no effect on the direction of IQIYI i.e., IQIYI and Fangdd Network go up and down completely randomly.
Pair Corralation between IQIYI and Fangdd Network
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Fangdd Network. But the stock apears to be less risky and, when comparing its historical volatility, iQIYI Inc is 6.6 times less risky than Fangdd Network. The stock trades about -0.06 of its potential returns per unit of risk. The Fangdd Network Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Fangdd Network Group on August 24, 2024 and sell it today you would lose (32.00) from holding Fangdd Network Group or give up 35.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
iQIYI Inc vs. Fangdd Network Group
Performance |
| Timeline |
| iQIYI Inc |
| Fangdd Network Group |
IQIYI and Fangdd Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Fangdd Network
The main advantage of trading using opposite IQIYI and Fangdd Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Fangdd Network 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 Fangdd Network will offset losses from the drop in Fangdd Network's long position.The idea behind iQIYI Inc and Fangdd Network Group 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.| Fangdd Network vs. MDJM | Fangdd Network vs. Southcorp Capital | Fangdd Network vs. Frp Holdings Ord | Fangdd Network vs. Ucommune International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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