Correlation Between Bodyflight Sweden and DouYu International

Can any of the company-specific risk be diversified away by investing in both Bodyflight Sweden 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 Bodyflight Sweden and DouYu International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bodyflight Sweden AB and DouYu International Holdings, you can compare the effects of market volatilities on Bodyflight Sweden 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 Bodyflight Sweden with a short position of DouYu International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bodyflight Sweden and DouYu International.

Diversification Opportunities for Bodyflight Sweden and DouYu International

-0.2

Correlation Coefficient

Bodyflight Sweden  DouYu International

Good diversification

The 3 months correlation between Bodyflight and DouYu is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bodyflight Sweden AB and DouYu International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DouYu International and Bodyflight Sweden 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 Bodyflight Sweden AB 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 Bodyflight Sweden i.e., Bodyflight Sweden and DouYu International go up and down completely randomly.

Pair Corralation between Bodyflight Sweden and DouYu International

If you would invest  789.00  in DouYu International Holdings on January 25, 2024 and sell it today you would earn a total of  50.00  from holding DouYu International Holdings or generate 6.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Bodyflight Sweden AB  vs.  DouYu International Holdings

Bodyflight Sweden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bodyflight Sweden AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

DouYu International

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, DouYu International is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bodyflight Sweden and DouYu International

The main advantage of trading using opposite Bodyflight Sweden and DouYu International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bodyflight Sweden 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 Bodyflight Sweden AB 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.