Given investment horizon of 30 days, Ediets.com Inc. is expected to generate 5.77 times more return on investment than Baidu. However, Ediets is 5.77 times more volatile than Baidu Inc.. It trades about -0.01 of its potential returns per unit of risk. Baidu Inc. is currently generating about -0.28 per unit of risk. If you would invest 45.00 in Ediets.com Inc. on April 25, 2012 and sell it today you would lose (8.00) from holding Ediets.com Inc. or give up 17.78% of portfolio value over 30 days.
Diversification
Good diversification
Overlapping area represents amount of risk that can be diversified away by holding Ediets.com Inc. and Baidu Inc. in the same portfolio (assuming nothing else is changed)