Correlation Between Cheetah Mobile and Outbrain
Can any of the company-specific risk be diversified away by investing in both Cheetah Mobile and Outbrain 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 Outbrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheetah Mobile and Outbrain, you can compare the effects of market volatilities on Cheetah Mobile and Outbrain 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 Outbrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Mobile and Outbrain.
Diversification Opportunities for Cheetah Mobile and Outbrain
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cheetah and Outbrain is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Mobile and Outbrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outbrain 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 Outbrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outbrain has no effect on the direction of Cheetah Mobile i.e., Cheetah Mobile and Outbrain go up and down completely randomly.
Pair Corralation between Cheetah Mobile and Outbrain
Given the investment horizon of 90 days Cheetah Mobile is expected to generate 1.99 times less return on investment than Outbrain. In addition to that, Cheetah Mobile is 1.6 times more volatile than Outbrain. It trades about 0.07 of its total potential returns per unit of risk. Outbrain is currently generating about 0.22 per unit of volatility. If you would invest 430.00 in Outbrain on October 25, 2024 and sell it today you would earn a total of 213.00 from holding Outbrain or generate 49.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheetah Mobile vs. Outbrain
Performance |
| Timeline |
| Cheetah Mobile |
| Outbrain |
Cheetah Mobile and Outbrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheetah Mobile and Outbrain
The main advantage of trading using opposite Cheetah Mobile and Outbrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Mobile position performs unexpectedly, Outbrain 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 Outbrain will offset losses from the drop in Outbrain's long position.| Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Yirendai | Cheetah Mobile vs. Xunlei Ltd Adr | Cheetah Mobile vs. Phoenix New Media |
| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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