Correlation Between Kuaishou Technology and DouYu International

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

By analyzing existing cross correlation between Kuaishou Technology and DouYu International Holdings, you can compare the effects of market volatilities on Kuaishou Technology and DouYu International 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 Kuaishou Technology with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and DouYu International.

Diversification Opportunities for Kuaishou Technology and DouYu International

-0.26

Correlation Coefficient

Kuaishou Technology  DouYu International

Very good diversification

The 3 months correlation between Kuaishou and DouYu is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Kuaishou Technology 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 Kuaishou Technology are associated (or correlated) with DouYu International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DouYu International has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and DouYu International go up and down completely randomly.

Pair Corralation between Kuaishou Technology and DouYu International

Assuming the 90 days horizon Kuaishou Technology is expected to generate 0.94 times more return on investment than DouYu International. However, Kuaishou Technology is 1.06 times less risky than DouYu International. It trades about 0.07 of its potential returns per unit of risk. DouYu International Holdings is currently generating about -0.05 per unit of risk. If you would invest  125.00  in Kuaishou Technology on December 2, 2024 and sell it today you would earn a total of  19.00  from holding Kuaishou Technology or generate 15.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

Kuaishou Technology  vs.  DouYu International Holdings

Kuaishou Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kuaishou Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Kuaishou Technology showed solid returns over the last few months and may actually be approaching a breakup point.

DouYu International

Risk-Adjusted Performance

Very Weak

Over the last 90 days DouYu International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kuaishou Technology and DouYu International

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

The idea behind Kuaishou Technology and DouYu International Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.