Correlation Between Cheche Group and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Cheche Group and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Dow Jones.
Diversification Opportunities for Cheche Group and Dow Jones
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cheche and Dow is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Cheche Group i.e., Cheche Group and Dow Jones go up and down completely randomly.
Pair Corralation between Cheche Group and Dow Jones
Considering the 90-day investment horizon Cheche Group is expected to generate 1.75 times less return on investment than Dow Jones. In addition to that, Cheche Group is 3.32 times more volatile than Dow Jones Industrial. It trades about 0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.36 per unit of volatility. If you would invest 4,254,422 in Dow Jones Industrial on November 1, 2024 and sell it today you would earn a total of 216,930 from holding Dow Jones Industrial or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cheche Group Class vs. Dow Jones Industrial
Performance |
| Timeline |
Cheche Group and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cheche Group Class
Pair trading matchups for Cheche Group
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cheche Group and Dow Jones
The main advantage of trading using opposite Cheche Group and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Cheche Group vs. Integral Ad Science | Cheche Group vs. BCE Inc | Cheche Group vs. Arrow Electronics | Cheche Group vs. Freedom Internet Group |
| Dow Jones vs. WEC Energy Group | Dow Jones vs. Pure Cycle | Dow Jones vs. Tandy Leather Factory | Dow Jones vs. Tapestry |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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