Correlation Between Paramount Global and HUYA
Can any of the company-specific risk be diversified away by investing in both Paramount Global and HUYA 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 Paramount Global and HUYA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramount Global Class and HUYA Inc, you can compare the effects of market volatilities on Paramount Global and HUYA 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 Paramount Global with a short position of HUYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramount Global and HUYA.
Diversification Opportunities for Paramount Global and HUYA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Paramount and HUYA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class and HUYA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUYA Inc and Paramount Global 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 Paramount Global Class are associated (or correlated) with HUYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUYA Inc has no effect on the direction of Paramount Global i.e., Paramount Global and HUYA go up and down completely randomly.
Pair Corralation between Paramount Global and HUYA
Given the investment horizon of 90 days Paramount Global is expected to generate 10.4 times less return on investment than HUYA. But when comparing it to its historical volatility, Paramount Global Class is 2.69 times less risky than HUYA. It trades about 0.07 of its potential returns per unit of risk. HUYA Inc is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 302.00 in HUYA Inc on November 9, 2024 and sell it today you would earn a total of 67.00 from holding HUYA Inc or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramount Global Class vs. HUYA Inc
Performance |
| Timeline |
| Paramount Global Class |
| HUYA Inc |
Paramount Global and HUYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramount Global and HUYA
The main advantage of trading using opposite Paramount Global and HUYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global position performs unexpectedly, HUYA 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 HUYA will offset losses from the drop in HUYA's long position.| Paramount Global vs. Walt Disney | Paramount Global vs. Roku Inc | Paramount Global vs. Netflix | Paramount Global vs. AMC Entertainment Holdings |
| HUYA vs. Roku Inc | HUYA vs. Paramount Global Class | HUYA vs. Manchester United | HUYA vs. Warner Bros Discovery |
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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