Correlation Between Cheche Group and Alphabet
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Alphabet 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 Alphabet 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 Alphabet Inc Class C, you can compare the effects of market volatilities on Cheche Group and Alphabet 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 Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Alphabet.
Diversification Opportunities for Cheche Group and Alphabet
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheche and Alphabet is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Alphabet Inc Class C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet Class C 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet Class C has no effect on the direction of Cheche Group i.e., Cheche Group and Alphabet go up and down completely randomly.
Pair Corralation between Cheche Group and Alphabet
Considering the 90-day investment horizon Cheche Group Class is expected to generate 4.59 times more return on investment than Alphabet. However, Cheche Group is 4.59 times more volatile than Alphabet Inc Class C. It trades about 0.02 of its potential returns per unit of risk. Alphabet Inc Class C is currently generating about 0.07 per unit of risk. If you would invest 94.00 in Cheche Group Class on August 23, 2024 and sell it today you would lose (4.00) from holding Cheche Group Class or give up 4.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. Alphabet Inc Class C
Performance |
| Timeline |
| Cheche Group Class |
| Alphabet Class C |
Cheche Group and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Alphabet
The main advantage of trading using opposite Cheche Group and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| Cheche Group vs. Zillow Group Class | Cheche Group vs. Outbrain | Cheche Group vs. TuanChe ADR | Cheche Group vs. Weibo 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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