Correlation Between Auto Trader and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both Auto Trader 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 Auto Trader and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and Cheetah Mobile, you can compare the effects of market volatilities on Auto Trader 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 Auto Trader with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and Cheetah Mobile.
Diversification Opportunities for Auto Trader and Cheetah Mobile
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Auto and Cheetah is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and Auto Trader 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 Auto Trader Group 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 Auto Trader i.e., Auto Trader and Cheetah Mobile go up and down completely randomly.
Pair Corralation between Auto Trader and Cheetah Mobile
Assuming the 90 days horizon Auto Trader Group is expected to under-perform the Cheetah Mobile. But the pink sheet apears to be less risky and, when comparing its historical volatility, Auto Trader Group is 3.81 times less risky than Cheetah Mobile. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Cheetah Mobile is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Cheetah Mobile on November 4, 2024 and sell it today you would lose (7.00) from holding Cheetah Mobile or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. Cheetah Mobile
Performance |
| Timeline |
| Auto Trader Group |
| Cheetah Mobile |
Auto Trader and Cheetah Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and Cheetah Mobile
The main advantage of trading using opposite Auto Trader and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader 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.| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |