Correlation Between IQIYI and Athena Bitcoin

Can any of the company-specific risk be diversified away by investing in both IQIYI and Athena Bitcoin 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 Athena Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iQIYI Inc and Athena Bitcoin Global, you can compare the effects of market volatilities on IQIYI and Athena Bitcoin 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 Athena Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Athena Bitcoin.

Diversification Opportunities for IQIYI and Athena Bitcoin

-0.58

Correlation Coefficient

IQIYI  Athena Bitcoin

Excellent diversification

The 3 months correlation between IQIYI and Athena is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Athena Bitcoin Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athena Bitcoin Global 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 Athena Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athena Bitcoin Global has no effect on the direction of IQIYI i.e., IQIYI and Athena Bitcoin go up and down completely randomly.

Pair Corralation between IQIYI and Athena Bitcoin

Allowing for the 90-day total investment horizon iQIYI Inc is expected to generate 0.54 times more return on investment than Athena Bitcoin. However, iQIYI Inc is 1.85 times less risky than Athena Bitcoin. It trades about -0.05 of its potential returns per unit of risk. Athena Bitcoin Global is currently generating about -0.05 per unit of risk. If you would invest  218.00  in iQIYI Inc on September 21, 2024 and sell it today you would lose (15.00) from holding iQIYI Inc or give up 6.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

iQIYI Inc  vs.  Athena Bitcoin Global

iQIYI Inc

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, IQIYI is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Athena Bitcoin Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Athena Bitcoin Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, Athena Bitcoin unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IQIYI and Athena Bitcoin

The main advantage of trading using opposite IQIYI and Athena Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI position performs unexpectedly, Athena Bitcoin 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 Athena Bitcoin will offset losses from the drop in Athena Bitcoin's long position.

The idea behind iQIYI Inc and Athena Bitcoin Global 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.