Correlation Between Cheetah Mobile and Sabio Holdings
Can any of the company-specific risk be diversified away by investing in both Cheetah Mobile and Sabio Holdings 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 Sabio Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheetah Mobile and Sabio Holdings, you can compare the effects of market volatilities on Cheetah Mobile and Sabio Holdings 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 Sabio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Mobile and Sabio Holdings.
Diversification Opportunities for Cheetah Mobile and Sabio Holdings
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheetah and Sabio is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Mobile and Sabio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabio Holdings 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 Sabio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabio Holdings has no effect on the direction of Cheetah Mobile i.e., Cheetah Mobile and Sabio Holdings go up and down completely randomly.
Pair Corralation between Cheetah Mobile and Sabio Holdings
Given the investment horizon of 90 days Cheetah Mobile is expected to generate 0.92 times more return on investment than Sabio Holdings. However, Cheetah Mobile is 1.09 times less risky than Sabio Holdings. It trades about 0.04 of its potential returns per unit of risk. Sabio Holdings is currently generating about 0.0 per unit of risk. If you would invest 295.00 in Cheetah Mobile on November 4, 2024 and sell it today you would earn a total of 151.00 from holding Cheetah Mobile or generate 51.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Cheetah Mobile vs. Sabio Holdings
Performance |
| Timeline |
| Cheetah Mobile |
| Sabio Holdings |
Cheetah Mobile and Sabio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheetah Mobile and Sabio Holdings
The main advantage of trading using opposite Cheetah Mobile and Sabio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Mobile position performs unexpectedly, Sabio Holdings 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 Sabio Holdings will offset losses from the drop in Sabio Holdings' long position.| Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Yirendai | Cheetah Mobile vs. Xunlei Ltd Adr | Cheetah Mobile vs. Phoenix New Media |
| Sabio Holdings vs. Tinybeans Group Limited | Sabio Holdings vs. DGTL Holdings | Sabio Holdings vs. Zoomd Technologies | Sabio Holdings vs. Quizam 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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