Correlation Between DouYu International and Kuaishou Technology
Can any of the company-specific risk be diversified away by investing in both DouYu International and Kuaishou 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 DouYu International and Kuaishou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DouYu International Holdings and Kuaishou Technology, you can compare the effects of market volatilities on DouYu International and Kuaishou 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 DouYu International with a short position of Kuaishou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Kuaishou Technology.
Diversification Opportunities for DouYu International and Kuaishou Technology
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DouYu and Kuaishou is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology and DouYu International 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 DouYu International Holdings are associated (or correlated) with Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of DouYu International i.e., DouYu International and Kuaishou Technology go up and down completely randomly.
Pair Corralation between DouYu International and Kuaishou Technology
Given the investment horizon of 90 days DouYu International Holdings is expected to under-perform the Kuaishou Technology. In addition to that, DouYu International is 1.52 times more volatile than Kuaishou Technology. It trades about -0.22 of its total potential returns per unit of risk. Kuaishou Technology is currently generating about 0.18 per unit of volatility. If you would invest 539.00 in Kuaishou Technology on November 28, 2024 and sell it today you would earn a total of 161.00 from holding Kuaishou Technology or generate 29.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
DouYu International Holdings vs. Kuaishou Technology
Performance |
Timeline |
DouYu International |
Kuaishou Technology |
DouYu International and Kuaishou Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DouYu International and Kuaishou Technology
The main advantage of trading using opposite DouYu International and Kuaishou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Kuaishou 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 Kuaishou Technology will offset losses from the drop in Kuaishou Technology's long position.DouYu International vs. YY Inc Class | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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