Correlation Between IQIYI and Cardlytics

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

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

Diversification Opportunities for IQIYI and Cardlytics

0.6

Correlation Coefficient

IQIYI  Cardlytics

Poor diversification

The 3 months correlation between IQIYI and Cardlytics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of IQIYI i.e., IQIYI and Cardlytics go up and down completely randomly.

Pair Corralation between IQIYI and Cardlytics

Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Cardlytics. But the stock apears to be less risky and, when comparing its historical volatility, iQIYI Inc is 3.27 times less risky than Cardlytics. The stock trades about -0.03 of its potential returns per unit of risk. The Cardlytics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  214.00  in Cardlytics on May 4, 2025 and sell it today you would lose (26.00) from holding Cardlytics or give up 12.15% of portfolio value over 90 days.

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

iQIYI Inc  vs.  Cardlytics

iQIYI Inc

Risk-Adjusted Performance

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Cardlytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardlytics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak essential indicators, Cardlytics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IQIYI and Cardlytics

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

The idea behind iQIYI Inc and Cardlytics 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.