Correlation Between DouYu International and Prosus
Can any of the company-specific risk be diversified away by investing in both DouYu International and Prosus 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 Prosus 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 Prosus, you can compare the effects of market volatilities on DouYu International and Prosus 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 Prosus. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and Prosus.
Diversification Opportunities for DouYu International and Prosus
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DouYu and Prosus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and Prosus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus 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 Prosus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus has no effect on the direction of DouYu International i.e., DouYu International and Prosus go up and down completely randomly.
Pair Corralation between DouYu International and Prosus
Given the investment horizon of 90 days DouYu International Holdings is expected to generate 2.91 times more return on investment than Prosus. However, DouYu International is 2.91 times more volatile than Prosus. It trades about 0.05 of its potential returns per unit of risk. Prosus is currently generating about 0.05 per unit of risk. If you would invest 777.00 in DouYu International Holdings on August 24, 2024 and sell it today you would earn a total of 224.00 from holding DouYu International Holdings or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
DouYu International Holdings vs. Prosus
Performance |
| Timeline |
| DouYu International |
| Prosus |
DouYu International and Prosus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DouYu International and Prosus
The main advantage of trading using opposite DouYu International and Prosus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, Prosus 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 Prosus will offset losses from the drop in Prosus' long position.| DouYu International vs. Twilio Inc | DouYu International vs. Baidu Inc | DouYu International vs. Snap Inc | DouYu International vs. ANGI Homeservices |
| Prosus vs. Tencent Holdings | Prosus vs. Trivago NV | Prosus vs. YY Inc Class | Prosus 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |