Correlation Between Arrow Electronics and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics and Cheche Group 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 Arrow Electronics and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Cheche Group Class, you can compare the effects of market volatilities on Arrow Electronics and Cheche Group 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 Arrow Electronics with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Cheche Group.
Diversification Opportunities for Arrow Electronics and Cheche Group
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Arrow and Cheche is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and Cheche Group go up and down completely randomly.
Pair Corralation between Arrow Electronics and Cheche Group
Considering the 90-day investment horizon Arrow Electronics is expected to generate 0.24 times more return on investment than Cheche Group. However, Arrow Electronics is 4.25 times less risky than Cheche Group. It trades about 0.02 of its potential returns per unit of risk. Cheche Group Class is currently generating about -0.05 per unit of risk. If you would invest 10,898 in Arrow Electronics on November 3, 2024 and sell it today you would earn a total of 757.00 from holding Arrow Electronics or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Cheche Group Class
Performance |
| Timeline |
| Arrow Electronics |
| Cheche Group Class |
Arrow Electronics and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Cheche Group
The main advantage of trading using opposite Arrow Electronics and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
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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 the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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