Correlation Between DouYu International and Rumble

Can any of the company-specific risk be diversified away by investing in both DouYu International and Rumble 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 Rumble 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 Rumble Inc, you can compare the effects of market volatilities on DouYu International and Rumble 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 Rumble. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Rumble.

Diversification Opportunities for DouYu International and Rumble

0.85

Correlation Coefficient

DouYu International  Rumble

Very poor diversification

The 3 months correlation between DouYu and Rumble is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble Inc 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 Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of DouYu International i.e., DouYu International and Rumble go up and down completely randomly.

Pair Corralation between DouYu International and Rumble

Given the investment horizon of 90 days DouYu International Holdings is expected to under-perform the Rumble. In addition to that, DouYu International is 2.19 times more volatile than Rumble Inc. It trades about -0.17 of its total potential returns per unit of risk. Rumble Inc is currently generating about -0.27 per unit of volatility. If you would invest  1,225  in Rumble Inc on January 9, 2025 and sell it today you would lose (519.00) from holding Rumble Inc or give up 42.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

DouYu International Holdings  vs.  Rumble Inc

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 May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Rumble Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rumble Inc 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 very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with DouYu International and Rumble

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

The idea behind DouYu International Holdings and Rumble Inc 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.