Correlation Between Tencent Holdings and YY Old

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

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

Diversification Opportunities for Tencent Holdings and YY Old

-0.53

Correlation Coefficient

Tencent Holdings  YY Old

Excellent diversification

The 3 months correlation between Tencent and YY Old is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Holdings Ltd and YY Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Old and Tencent Holdings 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 Tencent Holdings Ltd are associated (or correlated) with YY Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Old has no effect on the direction of Tencent Holdings i.e., Tencent Holdings and YY Old go up and down completely randomly.

Pair Corralation between Tencent Holdings and YY Old

Assuming the 90 days horizon Tencent Holdings is expected to generate 1.88 times less return on investment than YY Old. In addition to that, Tencent Holdings is 1.49 times more volatile than YY Old. It trades about 0.1 of its total potential returns per unit of risk. YY Old is currently generating about 0.28 per unit of volatility. If you would invest  4,201  in YY Old on May 4, 2025 and sell it today you would earn a total of  174.00  from holding YY Old or generate 4.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	24.19%
Values	Daily Returns

Tencent Holdings Ltd  vs.  YY Old

Tencent Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tencent Holdings Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, Tencent Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

YY Old

Risk-Adjusted Performance

Solid

Over the last 90 days YY Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, YY Old showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tencent Holdings and YY Old

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

The idea behind Tencent Holdings Ltd and YY Old 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .