Correlation Between Sinclair Broadcast and IQIYI
Can any of the company-specific risk be diversified away by investing in both Sinclair Broadcast 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 Sinclair Broadcast and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinclair Broadcast Group and iQIYI Inc, you can compare the effects of market volatilities on Sinclair Broadcast 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 Sinclair Broadcast with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinclair Broadcast and IQIYI.
Diversification Opportunities for Sinclair Broadcast and IQIYI
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinclair and IQIYI is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sinclair Broadcast Group and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Sinclair Broadcast 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 Sinclair Broadcast Group 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 Sinclair Broadcast i.e., Sinclair Broadcast and IQIYI go up and down completely randomly.
Pair Corralation between Sinclair Broadcast and IQIYI
Given the investment horizon of 90 days Sinclair Broadcast Group is expected to generate 1.16 times more return on investment than IQIYI. However, Sinclair Broadcast is 1.16 times more volatile than iQIYI Inc. It trades about 0.03 of its potential returns per unit of risk. iQIYI Inc is currently generating about -0.07 per unit of risk. If you would invest 1,468 in Sinclair Broadcast Group on August 24, 2024 and sell it today you would earn a total of 261.00 from holding Sinclair Broadcast Group or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinclair Broadcast Group vs. iQIYI Inc
Performance |
| Timeline |
| Sinclair Broadcast |
| iQIYI Inc |
Sinclair Broadcast and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinclair Broadcast and IQIYI
The main advantage of trading using opposite Sinclair Broadcast and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinclair Broadcast 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.| Sinclair Broadcast vs. News Corp A | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. Liberty Media | Sinclair Broadcast vs. AMC Networks |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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