Correlation Between Cheche Group and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Cheche Group and AerSale Corp 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 AerSale Corp 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 AerSale Corp, you can compare the effects of market volatilities on Cheche Group and AerSale Corp 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 AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and AerSale Corp.
Diversification Opportunities for Cheche Group and AerSale Corp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheche and AerSale is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp 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 AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of Cheche Group i.e., Cheche Group and AerSale Corp go up and down completely randomly.
Pair Corralation between Cheche Group and AerSale Corp
Considering the 90-day investment horizon Cheche Group Class is expected to under-perform the AerSale Corp. In addition to that, Cheche Group is 2.16 times more volatile than AerSale Corp. It trades about -0.07 of its total potential returns per unit of risk. AerSale Corp is currently generating about -0.03 per unit of volatility. If you would invest 1,052 in AerSale Corp on November 9, 2024 and sell it today you would lose (366.00) from holding AerSale Corp or give up 34.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. AerSale Corp
Performance |
| Timeline |
| Cheche Group Class |
| AerSale Corp |
Cheche Group and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and AerSale Corp
The main advantage of trading using opposite Cheche Group and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, AerSale Corp 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| Cheche Group vs. NETGEAR | Cheche Group vs. Fevertree Drinks Plc | Cheche Group vs. China Resources Beer | Cheche Group vs. Westrock Coffee |
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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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