Correlation Between Outbrain and DouYu International
Can any of the company-specific risk be diversified away by investing in both Outbrain 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 Outbrain and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and DouYu International Holdings, you can compare the effects of market volatilities on Outbrain 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 Outbrain with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and DouYu International.
Diversification Opportunities for Outbrain and DouYu International
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Outbrain and DouYu is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Outbrain 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 Outbrain 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 Outbrain i.e., Outbrain and DouYu International go up and down completely randomly.
Pair Corralation between Outbrain and DouYu International
Allowing for the 90-day total investment horizon Outbrain is expected to generate 2.49 times less return on investment than DouYu International. But when comparing it to its historical volatility, Outbrain is 2.98 times less risky than DouYu International. It trades about 0.04 of its potential returns per unit of risk. DouYu International Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,030 in DouYu International Holdings on August 23, 2024 and sell it today you would lose (60.00) from holding DouYu International Holdings or give up 5.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outbrain vs. DouYu International Holdings
Performance |
| Timeline |
| Outbrain |
| DouYu International |
Outbrain and DouYu International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and DouYu International
The main advantage of trading using opposite Outbrain and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain 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.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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