Correlation Between Cheche Group and Albemarle
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Albemarle 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 Cheche Group and Albemarle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheche Group Class and Albemarle, you can compare the effects of market volatilities on Cheche Group and Albemarle 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 Cheche Group with a short position of Albemarle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Albemarle.
Diversification Opportunities for Cheche Group and Albemarle
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and Albemarle is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Albemarle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albemarle and Cheche Group 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 Cheche Group Class are associated (or correlated) with Albemarle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albemarle has no effect on the direction of Cheche Group i.e., Cheche Group and Albemarle go up and down completely randomly.
Pair Corralation between Cheche Group and Albemarle
Considering the 90-day investment horizon Cheche Group Class is expected to generate 10.55 times more return on investment than Albemarle. However, Cheche Group is 10.55 times more volatile than Albemarle. It trades about 0.02 of its potential returns per unit of risk. Albemarle is currently generating about -0.02 per unit of risk. If you would invest 1,039 in Cheche Group Class on October 13, 2024 and sell it today you would lose (948.00) from holding Cheche Group Class or give up 91.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.25% |
| Values | Daily Returns |
Cheche Group Class vs. Albemarle
Performance |
| Timeline |
| Cheche Group Class |
| Albemarle |
Cheche Group and Albemarle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Albemarle
The main advantage of trading using opposite Cheche Group and Albemarle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Albemarle 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 Albemarle will offset losses from the drop in Albemarle's long position.| Cheche Group vs. Malaga Financial | Cheche Group vs. Coffee Holding Co | Cheche Group vs. Dennys Corp | Cheche Group vs. BJs Restaurants |
| Albemarle vs. Mills Music Trust | Albemarle vs. National Storage REIT | Albemarle vs. Cheche Group Class | Albemarle vs. CDW Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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