Correlation Between Cheer Holding and CuriosityStream

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

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

Diversification Opportunities for Cheer Holding and CuriosityStream

0.32

Correlation Coefficient

Cheer Holding  CuriosityStream

Weak diversification

The 3 months correlation between Cheer and CuriosityStream is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and CuriosityStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CuriosityStream and Cheer Holding 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 Cheer Holding are associated (or correlated) with CuriosityStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CuriosityStream has no effect on the direction of Cheer Holding i.e., Cheer Holding and CuriosityStream go up and down completely randomly.

Pair Corralation between Cheer Holding and CuriosityStream

Considering the 90-day investment horizon Cheer Holding is expected to under-perform the CuriosityStream. But the stock apears to be less risky and, when comparing its historical volatility, Cheer Holding is 7.55 times less risky than CuriosityStream. The stock trades about -0.22 of its potential returns per unit of risk. The CuriosityStream is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2.63  in CuriosityStream on October 6, 2024 and sell it today you would lose (0.03) from holding CuriosityStream or give up 1.14% of portfolio value over 90 days.

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

Cheer Holding  vs.  CuriosityStream

Cheer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cheer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CuriosityStream

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheer Holding and CuriosityStream

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

The idea behind Cheer Holding and CuriosityStream 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.