Correlation Between YY and Match
Can any of the company-specific risk be diversified away by investing in both YY and Match 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 YY and Match into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YY Inc Class and Match Group, you can compare the effects of market volatilities on YY and Match 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 YY with a short position of Match. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and Match.
Diversification Opportunities for YY and Match
Good diversification
The 3 months correlation between YY and Match is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and Match Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Match Group and YY 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 YY Inc Class are associated (or correlated) with Match. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Match Group has no effect on the direction of YY i.e., YY and Match go up and down completely randomly.
Pair Corralation between YY and Match
Allowing for the 90-day total investment horizon YY Inc Class is expected to generate 0.74 times more return on investment than Match. However, YY Inc Class is 1.35 times less risky than Match. It trades about 0.18 of its potential returns per unit of risk. Match Group is currently generating about -0.11 per unit of risk. If you would invest 3,458 in YY Inc Class on August 30, 2024 and sell it today you would earn a total of 412.00 from holding YY Inc Class or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
YY Inc Class vs. Match Group
Performance |
| Timeline |
| YY Inc Class |
| Match Group |
YY and Match Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and Match
The main advantage of trading using opposite YY and Match positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY position performs unexpectedly, Match 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 Match will offset losses from the drop in Match's long position.| YY vs. Weibo Corp | YY vs. DouYu International Holdings | YY vs. Tencent Music Entertainment | YY 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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