Correlation Between Dolphin Entertainment and IQIYI

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

Diversification Opportunities for Dolphin Entertainment and IQIYI

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Dolphin and IQIYI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and IQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQIYI Inc and Dolphin Entertainment 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 Dolphin Entertainment 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 Dolphin Entertainment i.e., Dolphin Entertainment and IQIYI go up and down completely randomly.

Pair Corralation between Dolphin Entertainment and IQIYI

Given the investment horizon of 90 days Dolphin Entertainment is expected to generate 1.09 times less return on investment than IQIYI. But when comparing it to its historical volatility, Dolphin Entertainment is 1.25 times less risky than IQIYI. It trades about 0.16 of its potential returns per unit of risk. IQIYI Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  367.00  in IQIYI Inc on December 29, 2023 and sell it today you would earn a total of  36.00  from holding IQIYI Inc or generate 9.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Dolphin Entertainment  vs.  IQIYI Inc

 Performance 
       Timeline  
Dolphin Entertainment 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Dolphin Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
IQIYI Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days IQIYI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Dolphin Entertainment and IQIYI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dolphin Entertainment and IQIYI

The main advantage of trading using opposite Dolphin Entertainment and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment 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.
The idea behind Dolphin Entertainment and IQIYI 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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