Correlation Between Baidu and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both Baidu and Spotify Technology 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 Spotify Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baidu Inc and Spotify Technology SA, you can compare the effects of market volatilities on Baidu and Spotify Technology 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 Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baidu and Spotify Technology.
Diversification Opportunities for Baidu and Spotify Technology
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baidu and Spotify is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Baidu Inc and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology 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 Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of Baidu i.e., Baidu and Spotify Technology go up and down completely randomly.
Pair Corralation between Baidu and Spotify Technology
Given the investment horizon of 90 days Baidu Inc is expected to generate 0.87 times more return on investment than Spotify Technology. However, Baidu Inc is 1.15 times less risky than Spotify Technology. It trades about 0.09 of its potential returns per unit of risk. Spotify Technology SA is currently generating about -0.01 per unit of risk. If you would invest 8,585 in Baidu Inc on June 5, 2025 and sell it today you would earn a total of 1,044 from holding Baidu Inc or generate 12.16% 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. Spotify Technology SA
Performance |
| Timeline |
| Baidu Inc |
| Spotify Technology |
Baidu and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baidu and Spotify Technology
The main advantage of trading using opposite Baidu and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baidu position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| Baidu vs. Tencent Music Entertainment | Baidu vs. Twilio Inc | Baidu vs. Spotify Technology SA | Baidu vs. Weibo Corp |
| Spotify Technology vs. Snap Inc | Spotify Technology vs. Twilio Inc | Spotify Technology vs. Fiverr International | Spotify Technology vs. Baidu Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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