Correlation Between Prosus and DouYu International
Can any of the company-specific risk be diversified away by investing in both Prosus 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 Prosus and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus and DouYu International Holdings, you can compare the effects of market volatilities on Prosus 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 Prosus with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus and DouYu International.
Diversification Opportunities for Prosus and DouYu International
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosus and DouYu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Prosus and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Prosus 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 Prosus 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 Prosus i.e., Prosus and DouYu International go up and down completely randomly.
Pair Corralation between Prosus and DouYu International
Assuming the 90 days horizon Prosus is expected to generate 0.42 times more return on investment than DouYu International. However, Prosus is 2.37 times less risky than DouYu International. It trades about -0.22 of its potential returns per unit of risk. DouYu International Holdings is currently generating about -0.09 per unit of risk. If you would invest 4,239 in Prosus on August 28, 2024 and sell it today you would lose (286.00) from holding Prosus or give up 6.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus vs. DouYu International Holdings
Performance |
| Timeline |
| Prosus |
| DouYu International |
Prosus and DouYu International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus and DouYu International
The main advantage of trading using opposite Prosus and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus 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.| Prosus vs. Tencent Holdings | Prosus vs. Autohome | Prosus vs. Arena Group Holdings | Prosus vs. Golden Grail Technology |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |