Correlation Between Chindata Group and DouYu International
Can any of the company-specific risk be diversified away by investing in both Chindata Group and DouYu International 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 Chindata Group and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chindata Group Holdings and DouYu International Holdings, you can compare the effects of market volatilities on Chindata Group and DouYu International 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 Chindata Group with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chindata Group and DouYu International.
Diversification Opportunities for Chindata Group and DouYu International
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chindata and DouYu is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Chindata Group 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 Chindata Group Holdings are associated (or correlated) with DouYu International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DouYu International has no effect on the direction of Chindata Group i.e., Chindata Group and DouYu International go up and down completely randomly.
Pair Corralation between Chindata Group and DouYu International
Allowing for the 90-day total investment horizon Chindata Group Holdings is expected to under-perform the DouYu International. But the stock apears to be less risky and, when comparing its historical volatility, Chindata Group Holdings is 1.39 times less risky than DouYu International. The stock trades about 0.0 of its potential returns per unit of risk. The DouYu International Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,590 in DouYu International Holdings on November 2, 2024 and sell it today you would lose (29.00) from holding DouYu International Holdings or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.67% |
| Values | Daily Returns |
Chindata Group Holdings vs. DouYu International Holdings
Performance |
| Timeline |
| Chindata Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DouYu International |
Chindata Group and DouYu International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chindata Group and DouYu International
The main advantage of trading using opposite Chindata Group and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chindata Group position performs unexpectedly, DouYu International 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 DouYu International will offset losses from the drop in DouYu International's long position.| Chindata Group vs. GDS Holdings | Chindata Group vs. ExlService Holdings | Chindata Group vs. Gartner | Chindata Group vs. VNET Group DRC |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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