Correlation Between Outbrain and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both Outbrain 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 Outbrain and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outbrain and Cheetah Mobile, you can compare the effects of market volatilities on Outbrain 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 Outbrain with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outbrain and Cheetah Mobile.
Diversification Opportunities for Outbrain and Cheetah Mobile
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Outbrain and Cheetah is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Outbrain and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and Outbrain 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 Outbrain 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 Outbrain i.e., Outbrain and Cheetah Mobile go up and down completely randomly.
Pair Corralation between Outbrain and Cheetah Mobile
Allowing for the 90-day total investment horizon Outbrain is expected to generate 0.62 times more return on investment than Cheetah Mobile. However, Outbrain is 1.6 times less risky than Cheetah Mobile. It trades about 0.22 of its potential returns per unit of risk. Cheetah Mobile is currently generating about 0.07 per unit of risk. 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 |
Outbrain vs. Cheetah Mobile
Performance |
| Timeline |
| Outbrain |
| Cheetah Mobile |
Outbrain and Cheetah Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outbrain and Cheetah Mobile
The main advantage of trading using opposite Outbrain and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outbrain 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.| Outbrain vs. Perion Network | Outbrain vs. Taboola Ltd Warrant | Outbrain vs. Fiverr International | Outbrain vs. ANGI Homeservices |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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