Correlation Between Cheche Group and Alliance Recovery
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Alliance Recovery 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 Alliance Recovery 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 Alliance Recovery, you can compare the effects of market volatilities on Cheche Group and Alliance Recovery 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 Alliance Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Alliance Recovery.
Diversification Opportunities for Cheche Group and Alliance Recovery
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and Alliance is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Alliance Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Recovery 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 Alliance Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Recovery has no effect on the direction of Cheche Group i.e., Cheche Group and Alliance Recovery go up and down completely randomly.
Pair Corralation between Cheche Group and Alliance Recovery
Considering the 90-day investment horizon Cheche Group Class is expected to generate 0.47 times more return on investment than Alliance Recovery. However, Cheche Group Class is 2.14 times less risky than Alliance Recovery. It trades about 0.01 of its potential returns per unit of risk. Alliance Recovery is currently generating about -0.25 per unit of risk. If you would invest 88.00 in Cheche Group Class on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Cheche Group Class or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Cheche Group Class vs. Alliance Recovery
Performance |
| Timeline |
| Cheche Group Class |
| Alliance Recovery |
Cheche Group and Alliance Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Alliance Recovery
The main advantage of trading using opposite Cheche Group and Alliance Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Alliance Recovery 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 Alliance Recovery will offset losses from the drop in Alliance Recovery's long position.| Cheche Group vs. Dave Busters Entertainment | Cheche Group vs. Skillz Platform | Cheche Group vs. National CineMedia | Cheche Group vs. Roblox Corp |
| Alliance Recovery vs. Aegon NV ADR | Alliance Recovery vs. Gladstone Investment | Alliance Recovery vs. flyExclusive, | Alliance Recovery vs. Cresud SACIF y |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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