Correlation Between DouYu International and A10 Network
Can any of the company-specific risk be diversified away by investing in both DouYu International and A10 Network 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 DouYu International and A10 Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DouYu International Holdings and A10 Network, you can compare the effects of market volatilities on DouYu International and A10 Network 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 DouYu International with a short position of A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of DouYu International and A10 Network.
Diversification Opportunities for DouYu International and A10 Network
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between DouYu and A10 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DouYu International Holdings and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network and DouYu International 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 DouYu International Holdings are associated (or correlated) with A10 Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A10 Network has no effect on the direction of DouYu International i.e., DouYu International and A10 Network go up and down completely randomly.
Pair Corralation between DouYu International and A10 Network
Given the investment horizon of 90 days DouYu International Holdings is expected to generate 2.82 times more return on investment than A10 Network. However, DouYu International is 2.82 times more volatile than A10 Network. It trades about 0.07 of its potential returns per unit of risk. A10 Network is currently generating about -0.15 per unit of risk. If you would invest 762.00 in DouYu International Holdings on January 20, 2024 and sell it today you would earn a total of 41.00 from holding DouYu International Holdings or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DouYu International Holdings vs. A10 Network
Performance |
| Timeline |
| DouYu International |
| A10 Network |
DouYu International and A10 Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DouYu International and A10 Network
The main advantage of trading using opposite DouYu International and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DouYu International position performs unexpectedly, A10 Network 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 A10 Network will offset losses from the drop in A10 Network's long position.| DouYu International vs. YY Inc Class | DouYu International vs. Weibo Corp | DouYu International vs. Tencent Music Entertainment | DouYu International vs. Autohome |
| A10 Network vs. Block Inc | A10 Network vs. Adobe Systems Incorporated | A10 Network vs. Crowdstrike Holdings | A10 Network vs. Cloudflare |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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