Correlation Between ScanSource and Cheetah Mobile
Can any of the company-specific risk be diversified away by investing in both ScanSource 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 ScanSource and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Cheetah Mobile, you can compare the effects of market volatilities on ScanSource 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 ScanSource with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Cheetah Mobile.
Diversification Opportunities for ScanSource and Cheetah Mobile
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ScanSource and Cheetah is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and ScanSource 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 ScanSource 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 ScanSource i.e., ScanSource and Cheetah Mobile go up and down completely randomly.
Pair Corralation between ScanSource and Cheetah Mobile
Given the investment horizon of 90 days ScanSource is expected to generate 2.05 times less return on investment than Cheetah Mobile. But when comparing it to its historical volatility, ScanSource is 1.96 times less risky than Cheetah Mobile. It trades about 0.23 of its potential returns per unit of risk. Cheetah Mobile is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 379.00 in Cheetah Mobile on April 22, 2025 and sell it today you would earn a total of 243.00 from holding Cheetah Mobile or generate 64.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ScanSource vs. Cheetah Mobile
Performance |
Timeline |
ScanSource |
Cheetah Mobile |
ScanSource and Cheetah Mobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ScanSource and Cheetah Mobile
The main advantage of trading using opposite ScanSource and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource 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.ScanSource vs. PC Connection | ScanSource vs. Insight Enterprises | ScanSource vs. Synnex | ScanSource vs. Scholastic |
Cheetah Mobile vs. Phoenix New Media | Cheetah Mobile vs. DGTL Holdings | Cheetah Mobile vs. Tuniu Corp | Cheetah Mobile vs. Yirendai |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |