Correlation Between DouYu International and Phoenix New
Can any of the company-specific risk be diversified away by investing in both DouYu International and Phoenix New 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 Phoenix New 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 Phoenix New Media, you can compare the effects of market volatilities on DouYu International and Phoenix New 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 Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Phoenix New.
Diversification Opportunities for DouYu International and Phoenix New
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DouYu and Phoenix is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media 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 Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of DouYu International i.e., DouYu International and Phoenix New go up and down completely randomly.
Pair Corralation between DouYu International and Phoenix New
Given the investment horizon of 90 days DouYu International Holdings is expected to under-perform the Phoenix New. But the stock apears to be less risky and, when comparing its historical volatility, DouYu International Holdings is 1.07 times less risky than Phoenix New. The stock trades about -0.03 of its potential returns per unit of risk. The Phoenix New Media is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Phoenix New Media on December 30, 2023 and sell it today you would lose (143.00) from holding Phoenix New Media or give up 42.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DouYu International Holdings vs. Phoenix New Media
Performance |
Timeline |
DouYu International |
Phoenix New Media |
DouYu International and Phoenix New Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DouYu International and Phoenix New
The main advantage of trading using opposite DouYu International and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Phoenix New 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 Phoenix New will offset losses from the drop in Phoenix New's long position.DouYu International vs. Zillow Group Class | DouYu International vs. Weibo Corp | DouYu International vs. Zillow Group | DouYu International vs. Zhihu Inc ADR |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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