Correlation Between IQIYI and Jianpu Technology
Can any of the company-specific risk be diversified away by investing in both IQIYI and Jianpu Technology 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 IQIYI and Jianpu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Jianpu Technology, you can compare the effects of market volatilities on IQIYI and Jianpu Technology 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 IQIYI with a short position of Jianpu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Jianpu Technology.
Diversification Opportunities for IQIYI and Jianpu Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IQIYI and Jianpu is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Jianpu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianpu Technology and IQIYI 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 iQIYI Inc are associated (or correlated) with Jianpu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianpu Technology has no effect on the direction of IQIYI i.e., IQIYI and Jianpu Technology go up and down completely randomly.
Pair Corralation between IQIYI and Jianpu Technology
Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 0.87 times more return on investment than Jianpu Technology. However, iQIYI Inc is 1.15 times less risky than Jianpu Technology. It trades about 0.06 of its potential returns per unit of risk. Jianpu Technology is currently generating about -0.01 per unit of risk. If you would invest 220.00 in iQIYI Inc on January 19, 2024 and sell it today you would earn a total of 200.00 from holding iQIYI Inc or generate 90.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.22% |
| Values | Daily Returns |
iQIYI Inc vs. Jianpu Technology
Performance |
| Timeline |
| iQIYI Inc |
| Jianpu Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
IQIYI and Jianpu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Jianpu Technology
The main advantage of trading using opposite IQIYI and Jianpu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Jianpu Technology 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 Jianpu Technology will offset losses from the drop in Jianpu Technology's long position.| IQIYI vs. Roku Inc | IQIYI vs. Paramount Global Class | IQIYI vs. Warner Bros Discovery | IQIYI vs. Paramount Global Class |
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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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