Correlation Between VNET Group and Cheetah Mobile

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

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

Diversification Opportunities for VNET Group and Cheetah Mobile

0.82

Correlation Coefficient

VNET Group  Cheetah Mobile

Very poor diversification

The 3 months correlation between VNET and Cheetah is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VNET Group DRC and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and VNET Group 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 VNET Group DRC 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 VNET Group i.e., VNET Group and Cheetah Mobile go up and down completely randomly.

Pair Corralation between VNET Group and Cheetah Mobile

Given the investment horizon of 90 days VNET Group DRC is expected to generate 1.31 times more return on investment than Cheetah Mobile. However, VNET Group is 1.31 times more volatile than Cheetah Mobile. It trades about 0.14 of its potential returns per unit of risk. Cheetah Mobile is currently generating about 0.14 per unit of risk. If you would invest  539.00  in VNET Group DRC on May 28, 2025 and sell it today you would earn a total of  242.00  from holding VNET Group DRC or generate 44.9% return on investment over 90 days.

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

VNET Group DRC  vs.  Cheetah Mobile

VNET Group DRC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VNET Group DRC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, VNET Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cheetah Mobile

Risk-Adjusted Performance

Fair

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 fragile fundamental indicators, Cheetah Mobile displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VNET Group and Cheetah Mobile

The main advantage of trading using opposite VNET Group and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VNET Group 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 VNET Group DRC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.