Correlation Between Phoenix New and DouYu International

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Can any of the company-specific risk be diversified away by investing in both Phoenix New 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 Phoenix New and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix New Media and DouYu International Holdings, you can compare the effects of market volatilities on Phoenix New 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 Phoenix New with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix New and DouYu International.

Diversification Opportunities for Phoenix New and DouYu International

-0.28
  Correlation Coefficient

Very good diversification

The 3 months correlation between Phoenix and DouYu is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix New Media and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Phoenix New 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 Phoenix New Media 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 Phoenix New i.e., Phoenix New and DouYu International go up and down completely randomly.

Pair Corralation between Phoenix New and DouYu International

Given the investment horizon of 90 days Phoenix New Media is expected to generate 2.45 times more return on investment than DouYu International. However, Phoenix New is 2.45 times more volatile than DouYu International Holdings. It trades about 0.07 of its potential returns per unit of risk. DouYu International Holdings is currently generating about -0.06 per unit of risk. If you would invest  150.00  in Phoenix New Media on December 29, 2023 and sell it today you would earn a total of  12.00  from holding Phoenix New Media or generate 8.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Phoenix New Media  vs.  DouYu International Holdings

 Performance 
       Timeline  
Phoenix New Media 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Phoenix New Media are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Phoenix New reported solid returns over the last few months and may actually be approaching a breakup point.
DouYu International 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days DouYu International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Phoenix New and DouYu International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Phoenix New and DouYu International

The main advantage of trading using opposite Phoenix New and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix New 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.
The idea behind Phoenix New Media and DouYu International Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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