Correlation Between IQIYI and 00108WAF7

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Can any of the company-specific risk be diversified away by investing in both IQIYI and 00108WAF7 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 00108WAF7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and AEP TEX INC, you can compare the effects of market volatilities on IQIYI and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and 00108WAF7.

Diversification Opportunities for IQIYI and 00108WAF7

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between IQIYI and 00108WAF7 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of IQIYI i.e., IQIYI and 00108WAF7 go up and down completely randomly.

Pair Corralation between IQIYI and 00108WAF7

Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 1.5 times more return on investment than 00108WAF7. However, IQIYI is 1.5 times more volatile than AEP TEX INC. It trades about 0.09 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.09 per unit of risk. If you would invest  220.00  in iQIYI Inc on September 13, 2024 and sell it today you would earn a total of  15.00  from holding iQIYI Inc or generate 6.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy66.67%
ValuesDaily Returns

iQIYI Inc  vs.  AEP TEX INC

 Performance 
       Timeline  
iQIYI Inc 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in iQIYI Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IQIYI reported solid returns over the last few months and may actually be approaching a breakup point.
AEP TEX INC 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AEP TEX INC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, 00108WAF7 sustained solid returns over the last few months and may actually be approaching a breakup point.

IQIYI and 00108WAF7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IQIYI and 00108WAF7

The main advantage of trading using opposite IQIYI and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.
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The idea behind iQIYI Inc and AEP TEX INC 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.
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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