Correlation Between Phoenix New and DouYu International
Can any of the company-specific risk be diversified away by investing in both Phoenix New 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 Phoenix New and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix New Media and DouYu International Holdings, you can compare the effects of market volatilities on Phoenix New 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 Phoenix New with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and DouYu International.
Diversification Opportunities for Phoenix New and DouYu International
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phoenix and DouYu is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Phoenix New 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 Phoenix New Media 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 Phoenix New i.e., Phoenix New and DouYu International go up and down completely randomly.
Pair Corralation between Phoenix New and DouYu International
Given the investment horizon of 90 days Phoenix New Media is expected to under-perform the DouYu International. But the stock apears to be less risky and, when comparing its historical volatility, Phoenix New Media is 2.34 times less risky than DouYu International. The stock trades about -0.16 of its potential returns per unit of risk. The DouYu International Holdings is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,117 in DouYu International Holdings on November 2, 2024 and sell it today you would earn a total of 496.00 from holding DouYu International Holdings or generate 44.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix New Media vs. DouYu International Holdings
Performance |
| Timeline |
| Phoenix New Media |
| DouYu International |
Phoenix New and DouYu International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix New and DouYu International
The main advantage of trading using opposite Phoenix New and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New 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.| Phoenix New vs. Onfolio Holdings | Phoenix New vs. Starbox Group Holdings | Phoenix New vs. MediaAlpha | Phoenix New vs. Metalpha Technology Holding |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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