Correlation Between Springs Global and Baidu
Can any of the company-specific risk be diversified away by investing in both Springs Global and Baidu 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 Springs Global and Baidu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Springs Global Participaes and Baidu Inc, you can compare the effects of market volatilities on Springs Global and Baidu 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 Springs Global with a short position of Baidu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Springs Global and Baidu.
Diversification Opportunities for Springs Global and Baidu
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Springs and Baidu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Springs Global Participaes and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and Springs Global 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 Springs Global Participaes are associated (or correlated) with Baidu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baidu Inc has no effect on the direction of Springs Global i.e., Springs Global and Baidu go up and down completely randomly.
Pair Corralation between Springs Global and Baidu
Assuming the 90 days trading horizon Springs Global Participaes is expected to generate 18.28 times more return on investment than Baidu. However, Springs Global is 18.28 times more volatile than Baidu Inc. It trades about 0.09 of its potential returns per unit of risk. Baidu Inc is currently generating about -0.02 per unit of risk. If you would invest 580.00 in Springs Global Participaes on August 28, 2024 and sell it today you would lose (416.00) from holding Springs Global Participaes or give up 71.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Springs Global Participaes vs. Baidu Inc
Performance |
| Timeline |
| Springs Global Parti |
| Baidu Inc |
Springs Global and Baidu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Springs Global and Baidu
The main advantage of trading using opposite Springs Global and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Springs Global position performs unexpectedly, Baidu 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 Baidu will offset losses from the drop in Baidu's long position.| Springs Global vs. Baidu Inc | Springs Global vs. Deutsche Bank Aktiengesellschaft | Springs Global vs. HSBC Holdings plc | Springs Global vs. The Bank of |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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