Correlation Between Cheche Group and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Coupang LLC 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 Coupang LLC 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 Coupang LLC, you can compare the effects of market volatilities on Cheche Group and Coupang LLC 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 Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Coupang LLC.
Diversification Opportunities for Cheche Group and Coupang LLC
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and Coupang is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Cheche Group i.e., Cheche Group and Coupang LLC go up and down completely randomly.
Pair Corralation between Cheche Group and Coupang LLC
Considering the 90-day investment horizon Cheche Group Class is expected to under-perform the Coupang LLC. In addition to that, Cheche Group is 3.05 times more volatile than Coupang LLC. It trades about -0.05 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.1 per unit of volatility. If you would invest 1,437 in Coupang LLC on November 3, 2024 and sell it today you would earn a total of 914.00 from holding Coupang LLC or generate 63.6% 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. Coupang LLC
Performance |
| Timeline |
| Cheche Group Class |
| Coupang LLC |
Cheche Group and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Coupang LLC
The main advantage of trading using opposite Cheche Group and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Cheche Group vs. Dave Busters Entertainment | Cheche Group vs. Skillz Platform | Cheche Group vs. National CineMedia | Cheche Group vs. Roblox Corp |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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