Correlation Between BuzzFeed and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both BuzzFeed 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 BuzzFeed and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BuzzFeed and Cheetah Mobile, you can compare the effects of market volatilities on BuzzFeed 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 BuzzFeed with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of BuzzFeed and Cheetah Mobile.
Diversification Opportunities for BuzzFeed and Cheetah Mobile
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BuzzFeed and Cheetah is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BuzzFeed and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and BuzzFeed 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 BuzzFeed 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 BuzzFeed i.e., BuzzFeed and Cheetah Mobile go up and down completely randomly.
Pair Corralation between BuzzFeed and Cheetah Mobile
Given the investment horizon of 90 days BuzzFeed is expected to generate 4.39 times less return on investment than Cheetah Mobile. In addition to that, BuzzFeed is 1.14 times more volatile than Cheetah Mobile. It trades about 0.01 of its total potential returns per unit of risk. Cheetah Mobile is currently generating about 0.06 per unit of volatility. If you would invest 351.00 in Cheetah Mobile on October 26, 2024 and sell it today you would earn a total of 94.00 from holding Cheetah Mobile or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BuzzFeed vs. Cheetah Mobile
Performance |
| Timeline |
| BuzzFeed |
| Cheetah Mobile |
BuzzFeed and Cheetah Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BuzzFeed and Cheetah Mobile
The main advantage of trading using opposite BuzzFeed and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BuzzFeed 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.| BuzzFeed vs. MediaAlpha | BuzzFeed vs. Asset Entities Class | BuzzFeed vs. Yelp Inc | BuzzFeed vs. Shutterstock |
| 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 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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