Correlation Between Cheche Group and Aldel Financial
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Aldel Financial 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 Aldel Financial 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 Aldel Financial II, you can compare the effects of market volatilities on Cheche Group and Aldel Financial 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 Aldel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Aldel Financial.
Diversification Opportunities for Cheche Group and Aldel Financial
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and Aldel is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Aldel Financial II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldel Financial II 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 Aldel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldel Financial II has no effect on the direction of Cheche Group i.e., Cheche Group and Aldel Financial go up and down completely randomly.
Pair Corralation between Cheche Group and Aldel Financial
Considering the 90-day investment horizon Cheche Group Class is expected to generate 33.12 times more return on investment than Aldel Financial. However, Cheche Group is 33.12 times more volatile than Aldel Financial II. It trades about 0.06 of its potential returns per unit of risk. Aldel Financial II is currently generating about 0.29 per unit of risk. If you would invest 79.00 in Cheche Group Class on October 26, 2024 and sell it today you would earn a total of 8.00 from holding Cheche Group Class or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 44.07% |
| Values | Daily Returns |
Cheche Group Class vs. Aldel Financial II
Performance |
| Timeline |
| Cheche Group Class |
| Aldel Financial II |
Cheche Group and Aldel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Aldel Financial
The main advantage of trading using opposite Cheche Group and Aldel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Aldel Financial 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 Aldel Financial will offset losses from the drop in Aldel Financial's long position.| Cheche Group vs. Live Ventures | Cheche Group vs. Autohome | Cheche Group vs. Lowes Companies | Cheche Group vs. JetBlue Airways Corp |
| Aldel Financial vs. Voyager Acquisition Corp | Aldel Financial vs. dMY Squared Technology | Aldel Financial vs. YHN Acquisition I | Aldel Financial vs. YHN Acquisition I |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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