Correlation Between Lizhi and YY

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

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

Diversification Opportunities for Lizhi and YY

0.0

Correlation Coefficient

Lizhi  YY

Pay attention - limited upside

The 3 months correlation between Lizhi and YY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lizhi Inc and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class and Lizhi 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 Lizhi Inc are associated (or correlated) with YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Lizhi i.e., Lizhi and YY go up and down completely randomly.

Pair Corralation between Lizhi and YY

If you would invest  4,164  in YY Inc Class on December 26, 2024 and sell it today you would earn a total of  39.00  from holding YY Inc Class or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lizhi Inc  vs.  YY Inc Class

Lizhi Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lizhi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Lizhi is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

YY Inc Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YY Inc Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, YY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lizhi and YY

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

The idea behind Lizhi Inc and YY Inc Class 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.