Correlation Between Cheche Group and Alaska Air
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Alaska Air 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 Alaska Air 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 Alaska Air Group, you can compare the effects of market volatilities on Cheche Group and Alaska Air 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 Alaska Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Alaska Air.
Diversification Opportunities for Cheche Group and Alaska Air
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and Alaska is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Alaska Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Air Group 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 Alaska Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Air Group has no effect on the direction of Cheche Group i.e., Cheche Group and Alaska Air go up and down completely randomly.
Pair Corralation between Cheche Group and Alaska Air
Considering the 90-day investment horizon Cheche Group Class is expected to under-perform the Alaska Air. In addition to that, Cheche Group is 3.21 times more volatile than Alaska Air Group. It trades about -0.07 of its total potential returns per unit of risk. Alaska Air Group is currently generating about 0.14 per unit of volatility. If you would invest 3,442 in Alaska Air Group on November 9, 2024 and sell it today you would earn a total of 3,999 from holding Alaska Air Group or generate 116.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. Alaska Air Group
Performance |
| Timeline |
| Cheche Group Class |
| Alaska Air Group |
Cheche Group and Alaska Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Alaska Air
The main advantage of trading using opposite Cheche Group and Alaska Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Alaska Air 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 Alaska Air will offset losses from the drop in Alaska Air's long position.| Cheche Group vs. NETGEAR | Cheche Group vs. Fevertree Drinks Plc | Cheche Group vs. China Resources Beer | Cheche Group vs. Westrock Coffee |
| Alaska Air vs. Delta Air Lines | Alaska Air vs. United Airlines Holdings | Alaska Air vs. American Airlines Group | Alaska Air vs. JetBlue Airways 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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