Correlation Between Cheetah Mobile and Auto Trader
Can any of the company-specific risk be diversified away by investing in both Cheetah Mobile and Auto Trader 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 Cheetah Mobile and Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheetah Mobile and Auto Trader Group, you can compare the effects of market volatilities on Cheetah Mobile and Auto Trader 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 Cheetah Mobile with a short position of Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Mobile and Auto Trader.
Diversification Opportunities for Cheetah Mobile and Auto Trader
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheetah and Auto is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Mobile and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group and Cheetah Mobile 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 Cheetah Mobile are associated (or correlated) with Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of Cheetah Mobile i.e., Cheetah Mobile and Auto Trader go up and down completely randomly.
Pair Corralation between Cheetah Mobile and Auto Trader
Given the investment horizon of 90 days Cheetah Mobile is expected to generate 3.65 times more return on investment than Auto Trader. However, Cheetah Mobile is 3.65 times more volatile than Auto Trader Group. It trades about 0.07 of its potential returns per unit of risk. Auto Trader Group is currently generating about -0.22 per unit of risk. If you would invest 425.00 in Cheetah Mobile on October 25, 2024 and sell it today you would earn a total of 61.00 from holding Cheetah Mobile or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Cheetah Mobile vs. Auto Trader Group
Performance |
| Timeline |
| Cheetah Mobile |
| Auto Trader Group |
Cheetah Mobile and Auto Trader Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheetah Mobile and Auto Trader
The main advantage of trading using opposite Cheetah Mobile and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Mobile position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.| Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Yirendai | Cheetah Mobile vs. Xunlei Ltd Adr | Cheetah Mobile vs. Phoenix New Media |
| Auto Trader vs. Tinybeans Group Limited | Auto Trader vs. DGTL Holdings | Auto Trader vs. Sabio Holdings | Auto Trader vs. Zoomd Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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