Correlation Between RSTN Old and Cheetah Mobile

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

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

Diversification Opportunities for RSTN Old and Cheetah Mobile

0.0

Correlation Coefficient

RSTN Old  Cheetah Mobile

Pay attention - limited upside

The 3 months correlation between RSTN and Cheetah is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RSTN Old and Cheetah Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and RSTN Old 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 RSTN Old 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 RSTN Old i.e., RSTN Old and Cheetah Mobile go up and down completely randomly.

Pair Corralation between RSTN Old and Cheetah Mobile

If you would invest  476.00  in Cheetah Mobile on December 28, 2024 and sell it today you would earn a total of  10.00  from holding Cheetah Mobile or generate 2.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

RSTN Old  vs.  Cheetah Mobile

RSTN Old

Risk-Adjusted Performance

Very Weak

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

Cheetah Mobile

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Mobile are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Cheetah Mobile may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with RSTN Old and Cheetah Mobile

The main advantage of trading using opposite RSTN Old and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSTN Old 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 RSTN Old 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.