Correlation Between Direct Digital and Lizhi
Can any of the company-specific risk be diversified away by investing in both Direct Digital and Lizhi 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 Direct Digital and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Direct Digital Holdings and Lizhi Inc, you can compare the effects of market volatilities on Direct Digital and Lizhi 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 Direct Digital with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direct Digital and Lizhi.
Diversification Opportunities for Direct Digital and Lizhi
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Direct and Lizhi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Direct Digital Holdings and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Direct Digital 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 Direct Digital Holdings are associated (or correlated) with Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Direct Digital i.e., Direct Digital and Lizhi go up and down completely randomly.
Pair Corralation between Direct Digital and Lizhi
Given the investment horizon of 90 days Direct Digital Holdings is expected to under-perform the Lizhi. But the stock apears to be less risky and, when comparing its historical volatility, Direct Digital Holdings is 4.74 times less risky than Lizhi. The stock trades about -0.07 of its potential returns per unit of risk. The Lizhi Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 478.00 in Lizhi Inc on July 20, 2025 and sell it today you would earn a total of 1,104 from holding Lizhi Inc or generate 230.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Direct Digital Holdings vs. Lizhi Inc
Performance |
| Timeline |
| Direct Digital Holdings |
| Lizhi Inc |
Direct Digital and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Direct Digital and Lizhi
The main advantage of trading using opposite Direct Digital and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Digital position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| Direct Digital vs. TNL Mediagene Ordinary | Direct Digital vs. Lendway | Direct Digital vs. Baosheng Media Group | Direct Digital vs. FAST TRACK GROUP |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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