Correlation Between PROS Holdings and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both PROS Holdings 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 PROS Holdings and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROS Holdings and Cheetah Mobile, you can compare the effects of market volatilities on PROS Holdings 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 PROS Holdings with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROS Holdings and Cheetah Mobile.
Diversification Opportunities for PROS Holdings and Cheetah Mobile
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PROS and Cheetah is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PROS Holdings and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and PROS Holdings 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 PROS Holdings 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 PROS Holdings i.e., PROS Holdings and Cheetah Mobile go up and down completely randomly.
Pair Corralation between PROS Holdings and Cheetah Mobile
Considering the 90-day investment horizon PROS Holdings is expected to under-perform the Cheetah Mobile. But the stock apears to be less risky and, when comparing its historical volatility, PROS Holdings is 4.01 times less risky than Cheetah Mobile. The stock trades about -0.14 of its potential returns per unit of risk. The Cheetah Mobile is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Cheetah Mobile on January 21, 2024 and sell it today you would earn a total of 125.00 from holding Cheetah Mobile or generate 54.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PROS Holdings vs. Cheetah Mobile
Performance |
| Timeline |
| PROS Holdings |
| Cheetah Mobile |
PROS Holdings and Cheetah Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROS Holdings and Cheetah Mobile
The main advantage of trading using opposite PROS Holdings and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROS Holdings 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.| PROS Holdings vs. Meridianlink | PROS Holdings vs. Enfusion | PROS Holdings vs. PDF Solutions | PROS Holdings vs. ePlus inc |
| Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Leju Holdings Limited | Cheetah Mobile vs. Yirendai | Cheetah Mobile vs. Xunlei Ltd Adr |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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