Correlation Between Cheetah Mobile and LightInTheBox Holding

Can any of the company-specific risk be diversified away by investing in both Cheetah Mobile and LightInTheBox Holding 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 LightInTheBox Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheetah Mobile and LightInTheBox Holding Co, you can compare the effects of market volatilities on Cheetah Mobile and LightInTheBox Holding 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 LightInTheBox Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Mobile and LightInTheBox Holding.

Diversification Opportunities for Cheetah Mobile and LightInTheBox Holding

0.45

Correlation Coefficient

Cheetah Mobile  LightInTheBox Holding

Very weak diversification

The 3 months correlation between Cheetah and LightInTheBox is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Mobile and LightInTheBox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightInTheBox Holding 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 LightInTheBox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightInTheBox Holding has no effect on the direction of Cheetah Mobile i.e., Cheetah Mobile and LightInTheBox Holding go up and down completely randomly.

Pair Corralation between Cheetah Mobile and LightInTheBox Holding

Given the investment horizon of 90 days Cheetah Mobile is expected to generate 0.87 times more return on investment than LightInTheBox Holding. However, Cheetah Mobile is 1.15 times less risky than LightInTheBox Holding. It trades about 0.09 of its potential returns per unit of risk. LightInTheBox Holding Co is currently generating about 0.08 per unit of risk. If you would invest  394.00  in Cheetah Mobile on May 15, 2025 and sell it today you would earn a total of  74.00  from holding Cheetah Mobile or generate 18.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cheetah Mobile  vs.  LightInTheBox Holding Co

Cheetah Mobile

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Mobile are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Cheetah Mobile displayed solid returns over the last few months and may actually be approaching a breakup point.

LightInTheBox Holding

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in LightInTheBox Holding Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LightInTheBox Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheetah Mobile and LightInTheBox Holding

The main advantage of trading using opposite Cheetah Mobile and LightInTheBox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Mobile position performs unexpectedly, LightInTheBox Holding 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 LightInTheBox Holding will offset losses from the drop in LightInTheBox Holding's long position.

The idea behind Cheetah Mobile and LightInTheBox Holding Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..