Correlation Between DouYu International and Phoenix New

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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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DouYu International Holdings  vs.  Phoenix New Media

 Performance 
       Timeline  
DouYu International 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Phoenix New Media 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix New Media are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Phoenix New reported solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind DouYu International Holdings and Phoenix New Media 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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