Correlation Between Meta Platforms and IQIYI

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Can any of the company-specific risk be diversified away by investing in both Meta Platforms 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 Meta Platforms and IQIYI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and IQIYI Inc, you can compare the effects of market volatilities on Meta Platforms 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 Meta Platforms with a short position of IQIYI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and IQIYI.

Diversification Opportunities for Meta Platforms and IQIYI

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Meta and IQIYI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and IQIYI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQIYI Inc and Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and IQIYI go up and down completely randomly.

Pair Corralation between Meta Platforms and IQIYI

If you would invest  288.00  in IQIYI Inc on December 19, 2023 and sell it today you would earn a total of  110.00  from holding IQIYI Inc or generate 38.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.27%
ValuesDaily Returns

Meta Platforms  vs.  IQIYI Inc

 Performance 
       Timeline  
Meta Platforms 

Risk-Adjusted Performance

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Over the last 90 days Meta Platforms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Meta Platforms is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
IQIYI Inc 

Risk-Adjusted Performance

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Over the last 90 days IQIYI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Meta Platforms and IQIYI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Meta Platforms and IQIYI

The main advantage of trading using opposite Meta Platforms and IQIYI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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 Meta Platforms 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.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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