Correlation Between Hp and Cheetah Mobile

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Can any of the company-specific risk be diversified away by investing in both Hp 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 Hp and Cheetah Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hp Inc and Cheetah Mobile, you can compare the effects of market volatilities on Hp 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 Hp with a short position of Cheetah Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hp and Cheetah Mobile.

Diversification Opportunities for Hp and Cheetah Mobile

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Hp and Cheetah is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hp Inc and Cheetah Mobile Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Mobile and Hp 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 Hp Inc 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 Hp i.e., Hp and Cheetah Mobile go up and down completely randomly.

Pair Corralation between Hp and Cheetah Mobile

Considering the 90-day investment horizon Hp Inc is expected to generate 0.53 times more return on investment than Cheetah Mobile. However, Hp Inc is 1.9 times less risky than Cheetah Mobile. It trades about 0.01 of its potential returns per unit of risk. Cheetah Mobile is currently generating about -0.09 per unit of risk. If you would invest  2,937  in Hp Inc on August 28, 2022 and sell it today you would earn a total of  78.00  from holding Hp Inc or generate 2.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hp Inc  vs.  Cheetah Mobile Inc

 Performance (%) 
       Timeline  
Hp Inc 
Hp Performance
0 of 100
Over the last 90 days Hp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hp is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the insiders.

Hp Price Channel

Cheetah Mobile 
Cheetah Performance
0 of 100
Over the last 90 days Cheetah Mobile 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 fundamental indicators remain relatively steady which may send shares a bit higher in December 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Cheetah Price Channel

Hp and Cheetah Mobile Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hp and Cheetah Mobile

The main advantage of trading using opposite Hp and Cheetah Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hp 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.
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The idea behind Hp Inc 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.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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