Correlation Between HUYA and A10 Network

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Can any of the company-specific risk be diversified away by investing in both HUYA 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 HUYA and A10 Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HUYA Inc and A10 Network, you can compare the effects of market volatilities on HUYA 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 HUYA with a short position of A10 Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUYA and A10 Network.

Diversification Opportunities for HUYA and A10 Network

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between HUYA and A10 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding HUYA Inc and A10 Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A10 Network and HUYA 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 HUYA Inc 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 HUYA i.e., HUYA and A10 Network go up and down completely randomly.

Pair Corralation between HUYA and A10 Network

Given the investment horizon of 90 days HUYA Inc is expected to generate 2.1 times more return on investment than A10 Network. However, HUYA is 2.1 times more volatile than A10 Network. It trades about 0.02 of its potential returns per unit of risk. A10 Network is currently generating about 0.02 per unit of risk. If you would invest  475.00  in HUYA Inc on December 30, 2023 and sell it today you would lose (20.00) from holding HUYA Inc or give up 4.21% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

HUYA Inc  vs.  A10 Network

 Performance 
       Timeline  
HUYA Inc 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in HUYA Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HUYA sustained solid returns over the last few months and may actually be approaching a breakup point.
A10 Network 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in A10 Network are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, A10 Network may actually be approaching a critical reversion point that can send shares even higher in April 2024.

HUYA and A10 Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HUYA and A10 Network

The main advantage of trading using opposite HUYA and A10 Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUYA 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.
The idea behind HUYA Inc and A10 Network 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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