Correlation Between Arena Group and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both Arena Group and Cheetah Mobile 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 Arena Group and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arena Group Holdings and Cheetah Mobile, you can compare the effects of market volatilities on Arena Group and Cheetah Mobile 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 Arena Group with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Group and Cheetah Mobile.
Diversification Opportunities for Arena Group and Cheetah Mobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arena and Cheetah is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Arena Group Holdings and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and Arena Group 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 Arena Group Holdings are associated (or correlated) with Cheetah Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheetah Mobile has no effect on the direction of Arena Group i.e., Arena Group and Cheetah Mobile go up and down completely randomly.
Pair Corralation between Arena Group and Cheetah Mobile
Given the investment horizon of 90 days Arena Group Holdings is expected to generate 12.01 times more return on investment than Cheetah Mobile. However, Arena Group is 12.01 times more volatile than Cheetah Mobile. It trades about 0.19 of its potential returns per unit of risk. Cheetah Mobile is currently generating about 0.04 per unit of risk. If you would invest 67.00 in Arena Group Holdings on August 27, 2024 and sell it today you would earn a total of 88.00 from holding Arena Group Holdings or generate 131.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arena Group Holdings vs. Cheetah Mobile
Performance |
| Timeline |
| Arena Group Holdings |
| Cheetah Mobile |
Arena Group and Cheetah Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arena Group and Cheetah Mobile
The main advantage of trading using opposite Arena Group and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arena Group position performs unexpectedly, Cheetah Mobile 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 Cheetah Mobile will offset losses from the drop in Cheetah Mobile's long position.| Arena Group vs. Cerberus Cyber Sentinel | Arena Group vs. Alta Equipment Group | Arena Group vs. AN2 Therapeutics | Arena Group vs. KORE Group Holdings |
| Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Yirendai | Cheetah Mobile vs. Xunlei Ltd Adr | Cheetah Mobile vs. Phoenix New Media |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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