Correlation Between DouYu International and Autohome
Can any of the company-specific risk be diversified away by investing in both DouYu International and Autohome 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 Autohome 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 Autohome, you can compare the effects of market volatilities on DouYu International and Autohome 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 Autohome. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Autohome.
Diversification Opportunities for DouYu International and Autohome
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DouYu and Autohome is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Autohome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autohome 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 Autohome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autohome has no effect on the direction of DouYu International i.e., DouYu International and Autohome go up and down completely randomly.
Pair Corralation between DouYu International and Autohome
Given the investment horizon of 90 days DouYu International Holdings is expected to under-perform the Autohome. But the stock apears to be less risky and, when comparing its historical volatility, DouYu International Holdings is 1.05 times less risky than Autohome. The stock trades about -0.01 of its potential returns per unit of risk. The Autohome is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,765 in Autohome on November 18, 2024 and sell it today you would earn a total of 245.00 from holding Autohome or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DouYu International Holdings vs. Autohome
Performance |
| Timeline |
| DouYu International |
| Autohome |
DouYu International and Autohome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DouYu International and Autohome
The main advantage of trading using opposite DouYu International and Autohome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Autohome 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 Autohome will offset losses from the drop in Autohome's long position.| DouYu International vs. YY Inc Class | DouYu International vs. Weibo Corp | DouYu International vs. Tencent Music Entertainment | DouYu International vs. Autohome |
| Autohome vs. Hello Group | Autohome vs. Weibo Corp | Autohome vs. Tencent Music Entertainment | Autohome vs. DouYu International Holdings |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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