Correlation Between Match and IQIYI
Can any of the company-specific risk be diversified away by investing in both Match 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 Match and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Match Group and iQIYI Inc, you can compare the effects of market volatilities on Match 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 Match with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Match and IQIYI.
Diversification Opportunities for Match and IQIYI
Excellent diversification
The 3 months correlation between Match and IQIYI is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and iQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iQIYI Inc and Match 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 Match 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 Match i.e., Match and IQIYI go up and down completely randomly.
Pair Corralation between Match and IQIYI
Given the investment horizon of 90 days Match Group is expected to under-perform the IQIYI. But the stock apears to be less risky and, when comparing its historical volatility, Match Group is 1.51 times less risky than IQIYI. The stock trades about -0.21 of its potential returns per unit of risk. The iQIYI Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 406.00 in iQIYI Inc on January 25, 2024 and sell it today you would earn a total of 76.00 from holding iQIYI Inc or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Match Group vs. iQIYI Inc
Performance |
| Timeline |
| Match Group |
| iQIYI Inc |
Match and IQIYI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Match and IQIYI
The main advantage of trading using opposite Match and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match 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 Match Group 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.| IQIYI vs. Roku Inc | IQIYI vs. Paramount Global Class | IQIYI vs. Warner Bros Discovery | IQIYI vs. Paramount Global Class |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |