Correlation Between Movie Studio and IQIYI
Can any of the company-specific risk be diversified away by investing in both Movie Studio 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 Movie Studio and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movie Studio and iQIYI Inc, you can compare the effects of market volatilities on Movie Studio 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 Movie Studio with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Studio and IQIYI.
Diversification Opportunities for Movie Studio and IQIYI
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Movie and IQIYI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Movie Studio and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Movie Studio 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 Movie Studio 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 Movie Studio i.e., Movie Studio and IQIYI go up and down completely randomly.
Pair Corralation between Movie Studio and IQIYI
Given the investment horizon of 90 days Movie Studio is expected to generate 4.91 times more return on investment than IQIYI. However, Movie Studio is 4.91 times more volatile than iQIYI Inc. It trades about 0.08 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.14 per unit of risk. If you would invest 0.10 in Movie Studio on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Movie Studio or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movie Studio vs. iQIYI Inc
Performance |
| Timeline |
| Movie Studio |
| iQIYI Inc |
Movie Studio and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Studio and IQIYI
The main advantage of trading using opposite Movie Studio and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Studio 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.| Movie Studio vs. Roku Inc | Movie Studio vs. SNM Gobal Holdings | Movie Studio vs. Seven Arts Entertainment | Movie Studio vs. All For One |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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