Correlation Between Cheer Holding and Ucloudlink

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

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

Diversification Opportunities for Cheer Holding and Ucloudlink

0.4

Correlation Coefficient

Cheer Holding  Ucloudlink

Very weak diversification

The 3 months correlation between Cheer and Ucloudlink is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and Ucloudlink Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucloudlink Group 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 Ucloudlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ucloudlink Group has no effect on the direction of Cheer Holding i.e., Cheer Holding and Ucloudlink go up and down completely randomly.

Pair Corralation between Cheer Holding and Ucloudlink

Considering the 90-day investment horizon Cheer Holding is expected to under-perform the Ucloudlink. But the stock apears to be less risky and, when comparing its historical volatility, Cheer Holding is 1.35 times less risky than Ucloudlink. The stock trades about -0.24 of its potential returns per unit of risk. The Ucloudlink Group is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  229.00  in Ucloudlink Group on December 29, 2024 and sell it today you would lose (105.00) from holding Ucloudlink Group or give up 45.85% of portfolio value over 90 days.

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

Cheer Holding  vs.  Ucloudlink Group

Cheer Holding

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ucloudlink Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ucloudlink Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cheer Holding and Ucloudlink

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

The idea behind Cheer Holding and Ucloudlink Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.