Correlation Between Yahoo and Baidu
Can any of the company-specific risk be diversified away by investing in both Yahoo 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 Yahoo and Baidu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yahoo Inc and Baidu Inc, you can compare the effects of market volatilities on Yahoo 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 Yahoo with a short position of Baidu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yahoo and Baidu.
Diversification Opportunities for Yahoo and Baidu
Pay attention - limited upside
The 3 months correlation between Yahoo and Baidu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yahoo Inc and Baidu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baidu Inc and Yahoo 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 Yahoo Inc 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 Yahoo i.e., Yahoo and Baidu go up and down completely randomly.
Pair Corralation between Yahoo and Baidu
If you would invest (100.00) in Yahoo Inc on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Yahoo Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Yahoo Inc vs. Baidu Inc
Performance |
| Timeline |
| Yahoo Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baidu Inc |
Yahoo and Baidu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yahoo and Baidu
The main advantage of trading using opposite Yahoo and Baidu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yahoo 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.| Yahoo vs. Welsbach Technology Metals | Yahoo vs. Franklin Wireless Corp | Yahoo vs. Blue Moon Metals | Yahoo vs. 24SevenOffice Group AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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