Correlation Between Tencent Music and Dolphin Entertainment
Can any of the company-specific risk be diversified away by investing in both Tencent Music and Dolphin Entertainment 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 Tencent Music and Dolphin Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Music Entertainment and Dolphin Entertainment, you can compare the effects of market volatilities on Tencent Music and Dolphin Entertainment 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 Tencent Music with a short position of Dolphin Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Music and Dolphin Entertainment.
Diversification Opportunities for Tencent Music and Dolphin Entertainment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tencent and Dolphin is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Music Entertainment and Dolphin Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Entertainment and Tencent Music 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 Tencent Music Entertainment are associated (or correlated) with Dolphin Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Entertainment has no effect on the direction of Tencent Music i.e., Tencent Music and Dolphin Entertainment go up and down completely randomly.
Pair Corralation between Tencent Music and Dolphin Entertainment
Considering the 90-day investment horizon Tencent Music Entertainment is expected to under-perform the Dolphin Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Tencent Music Entertainment is 2.08 times less risky than Dolphin Entertainment. The stock trades about -0.21 of its potential returns per unit of risk. The Dolphin Entertainment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Dolphin Entertainment on September 12, 2025 and sell it today you would earn a total of 38.00 from holding Dolphin Entertainment or generate 31.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tencent Music Entertainment vs. Dolphin Entertainment
Performance |
| Timeline |
| Tencent Music Entert |
| Dolphin Entertainment |
Tencent Music and Dolphin Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Music and Dolphin Entertainment
The main advantage of trading using opposite Tencent Music and Dolphin Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Music position performs unexpectedly, Dolphin Entertainment 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 Dolphin Entertainment will offset losses from the drop in Dolphin Entertainment's long position.| Tencent Music vs. Reddit, | Tencent Music vs. Baidu Inc | Tencent Music vs. Chunghwa Telecom Co | Tencent Music vs. Charter Communications |
| Dolphin Entertainment vs. Liberty Media | Dolphin Entertainment vs. Fox Corp Class | Dolphin Entertainment vs. Tencent Music Entertainment | Dolphin Entertainment vs. Chunghwa Telecom Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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