Correlation Between Cheche Group and Knife River
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Knife River 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 Knife River 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 Knife River, you can compare the effects of market volatilities on Cheche Group and Knife River 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 Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Knife River.
Diversification Opportunities for Cheche Group and Knife River
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheche and Knife is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River 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 Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Cheche Group i.e., Cheche Group and Knife River go up and down completely randomly.
Pair Corralation between Cheche Group and Knife River
Considering the 90-day investment horizon Cheche Group Class is expected to generate 1.36 times more return on investment than Knife River. However, Cheche Group is 1.36 times more volatile than Knife River. It trades about 0.1 of its potential returns per unit of risk. Knife River is currently generating about 0.09 per unit of risk. If you would invest 83.00 in Cheche Group Class on October 25, 2024 and sell it today you would earn a total of 4.00 from holding Cheche Group Class or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. Knife River
Performance |
| Timeline |
| Cheche Group Class |
| Knife River |
Cheche Group and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Knife River
The main advantage of trading using opposite Cheche Group and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Cheche Group vs. Procter Gamble | Cheche Group vs. TFI International | Cheche Group vs. National CineMedia | Cheche Group vs. Sphere Entertainment Co |
| Knife River vs. Hooker Furniture | Knife River vs. Norfolk Southern | Knife River vs. Coty Inc | Knife River vs. Academy Sports Outdoors |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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