Correlation Between MediaAlpha and Cheetah Mobile

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

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

Diversification Opportunities for MediaAlpha and Cheetah Mobile

-0.02

Correlation Coefficient

MediaAlpha  Cheetah Mobile

Good diversification

The 3 months correlation between MediaAlpha and Cheetah is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and MediaAlpha 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 MediaAlpha 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 MediaAlpha i.e., MediaAlpha and Cheetah Mobile go up and down completely randomly.

Pair Corralation between MediaAlpha and Cheetah Mobile

Considering the 90-day investment horizon MediaAlpha is expected to generate 19.78 times less return on investment than Cheetah Mobile. But when comparing it to its historical volatility, MediaAlpha is 1.98 times less risky than Cheetah Mobile. It trades about 0.01 of its potential returns per unit of risk. Cheetah Mobile is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  375.00  in Cheetah Mobile on May 4, 2025 and sell it today you would earn a total of  135.00  from holding Cheetah Mobile or generate 36.0% return on investment over 90 days.

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

MediaAlpha  vs.  Cheetah Mobile

MediaAlpha

Risk-Adjusted Performance

Weak

Over the last 90 days MediaAlpha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, MediaAlpha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cheetah Mobile

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Mobile are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Cheetah Mobile displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MediaAlpha and Cheetah Mobile

The main advantage of trading using opposite MediaAlpha and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha 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.

The idea behind MediaAlpha and Cheetah Mobile 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.