Correlation Between Warner Bros and HUYA
Can any of the company-specific risk be diversified away by investing in both Warner Bros 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 Warner Bros and HUYA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Bros Discovery and HUYA Inc, you can compare the effects of market volatilities on Warner Bros 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 Warner Bros with a short position of HUYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and HUYA.
Diversification Opportunities for Warner Bros and HUYA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Warner and HUYA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and HUYA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUYA Inc and Warner Bros 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 Warner Bros Discovery 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 Warner Bros i.e., Warner Bros and HUYA go up and down completely randomly.
Pair Corralation between Warner Bros and HUYA
Considering the 90-day investment horizon Warner Bros Discovery is expected to generate 1.06 times more return on investment than HUYA. However, Warner Bros is 1.06 times more volatile than HUYA Inc. It trades about 0.14 of its potential returns per unit of risk. HUYA Inc is currently generating about 0.06 per unit of risk. If you would invest 823.00 in Warner Bros Discovery on November 1, 2024 and sell it today you would earn a total of 238.90 from holding Warner Bros Discovery or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warner Bros Discovery vs. HUYA Inc
Performance |
| Timeline |
| Warner Bros Discovery |
| HUYA Inc |
Warner Bros and HUYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Bros and HUYA
The main advantage of trading using opposite Warner Bros and HUYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Bros 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.| Warner Bros vs. Walt Disney | Warner Bros vs. Roku Inc | Warner Bros vs. Netflix | Warner Bros vs. Paramount Global Class |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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