Correlation Between DouYu International and Lizhi
Can any of the company-specific risk be diversified away by investing in both DouYu International and Lizhi 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 Lizhi 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 Lizhi Inc, you can compare the effects of market volatilities on DouYu International and Lizhi 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 Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Lizhi.
Diversification Opportunities for DouYu International and Lizhi
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between DouYu and Lizhi is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi 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 Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of DouYu International i.e., DouYu International and Lizhi go up and down completely randomly.
Pair Corralation between DouYu International and Lizhi
If you would invest 898.00 in DouYu International Holdings on August 24, 2024 and sell it today you would earn a total of 74.00 from holding DouYu International Holdings or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
DouYu International Holdings vs. Lizhi Inc
Performance |
| Timeline |
| DouYu International |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DouYu International and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DouYu International and Lizhi
The main advantage of trading using opposite DouYu International and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| DouYu International vs. YY Inc Class | DouYu International vs. Weibo Corp | DouYu International vs. Tencent Music Entertainment | DouYu International vs. Autohome |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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