Correlation Between Marcus and IQIYI
Can any of the company-specific risk be diversified away by investing in both Marcus and IQIYI 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 Marcus and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marcus and iQIYI Inc, you can compare the effects of market volatilities on Marcus and IQIYI 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 Marcus with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marcus and IQIYI.
Diversification Opportunities for Marcus and IQIYI
Very good diversification
The 3 months correlation between Marcus and IQIYI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Marcus and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Marcus 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 Marcus are associated (or correlated) with IQIYI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iQIYI Inc has no effect on the direction of Marcus i.e., Marcus and IQIYI go up and down completely randomly.
Pair Corralation between Marcus and IQIYI
Considering the 90-day investment horizon Marcus is expected to generate 0.54 times more return on investment than IQIYI. However, Marcus is 1.86 times less risky than IQIYI. It trades about 0.19 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.08 per unit of risk. If you would invest 1,510 in Marcus on October 31, 2024 and sell it today you would earn a total of 570.00 from holding Marcus or generate 37.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marcus vs. iQIYI Inc
Performance |
| Timeline |
| Marcus |
| iQIYI Inc |
Marcus and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marcus and IQIYI
The main advantage of trading using opposite Marcus and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus position performs unexpectedly, IQIYI 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 IQIYI will offset losses from the drop in IQIYI's long position.| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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