Correlation Between DouYu International and Omnicom
Can any of the company-specific risk be diversified away by investing in both DouYu International and Omnicom 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 Omnicom 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 Omnicom Group, you can compare the effects of market volatilities on DouYu International and Omnicom 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 Omnicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Omnicom.
Diversification Opportunities for DouYu International and Omnicom
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DouYu and Omnicom is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Omnicom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnicom Group 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 Omnicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnicom Group has no effect on the direction of DouYu International i.e., DouYu International and Omnicom go up and down completely randomly.
Pair Corralation between DouYu International and Omnicom
Given the investment horizon of 90 days DouYu International Holdings is expected to under-perform the Omnicom. In addition to that, DouYu International is 1.71 times more volatile than Omnicom Group. It trades about -0.09 of its total potential returns per unit of risk. Omnicom Group is currently generating about 0.01 per unit of volatility. If you would invest 10,250 in Omnicom Group on August 27, 2024 and sell it today you would lose (12.00) from holding Omnicom Group or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DouYu International Holdings vs. Omnicom Group
Performance |
| Timeline |
| DouYu International |
| Omnicom Group |
DouYu International and Omnicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DouYu International and Omnicom
The main advantage of trading using opposite DouYu International and Omnicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Omnicom 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 Omnicom will offset losses from the drop in Omnicom'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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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