Correlation Between Baidu and Swisscom

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

By analyzing existing cross correlation between Baidu Inc and Swisscom AG, you can compare the effects of market volatilities on Baidu and Swisscom 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 Baidu with a short position of Swisscom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and Swisscom.

Diversification Opportunities for Baidu and Swisscom

-0.31

Correlation Coefficient

Baidu  Swisscom

Very good diversification

The 3 months correlation between Baidu and Swisscom is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and Swisscom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swisscom AG and Baidu 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 Baidu Inc are associated (or correlated) with Swisscom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swisscom AG has no effect on the direction of Baidu i.e., Baidu and Swisscom go up and down completely randomly.

Pair Corralation between Baidu and Swisscom

Assuming the 90 days horizon Baidu Inc is expected to generate 2.81 times more return on investment than Swisscom. However, Baidu is 2.81 times more volatile than Swisscom AG. It trades about 0.09 of its potential returns per unit of risk. Swisscom AG is currently generating about -0.08 per unit of risk. If you would invest  1,394  in Baidu Inc on September 14, 2025 and sell it today you would earn a total of  273.00  from holding Baidu Inc or generate 19.58% return on investment over 90 days.

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

Baidu Inc  vs.  Swisscom AG

Baidu Inc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Baidu Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Baidu reported solid returns over the last few months and may actually be approaching a breakup point.

Swisscom AG

Risk-Adjusted Performance

Weakest

Over the last 90 days Swisscom AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Baidu and Swisscom

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

The idea behind Baidu Inc and Swisscom AG 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .