Correlation Between Onfolio Holdings and Cheetah Mobile

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

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

Diversification Opportunities for Onfolio Holdings and Cheetah Mobile

0.36

Correlation Coefficient

Onfolio Holdings  Cheetah Mobile

Weak diversification

The 3 months correlation between Onfolio and Cheetah is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Onfolio Holdings and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and Onfolio Holdings 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 Onfolio Holdings 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 Onfolio Holdings i.e., Onfolio Holdings and Cheetah Mobile go up and down completely randomly.

Pair Corralation between Onfolio Holdings and Cheetah Mobile

Given the investment horizon of 90 days Onfolio Holdings is expected to under-perform the Cheetah Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Onfolio Holdings is 1.16 times less risky than Cheetah Mobile. The stock trades about -0.09 of its potential returns per unit of risk. The Cheetah Mobile is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  476.00  in Cheetah Mobile on December 29, 2024 and sell it today you would lose (38.00) from holding Cheetah Mobile or give up 7.98% of portfolio value over 90 days.

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

Onfolio Holdings  vs.  Cheetah Mobile

Onfolio Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Onfolio Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cheetah Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cheetah Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Cheetah Mobile is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Onfolio Holdings and Cheetah Mobile

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