Correlation Between Cheche Group and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on Cheche Group and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Safety Shot.
Diversification Opportunities for Cheche Group and Safety Shot
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheche and Safety is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Cheche Group i.e., Cheche Group and Safety Shot go up and down completely randomly.
Pair Corralation between Cheche Group and Safety Shot
Considering the 90-day investment horizon Cheche Group Class is expected to generate 0.42 times more return on investment than Safety Shot. However, Cheche Group Class is 2.37 times less risky than Safety Shot. It trades about 0.01 of its potential returns per unit of risk. Safety Shot is currently generating about -0.35 per unit of risk. If you would invest 88.00 in Cheche Group Class on November 3, 2024 and sell it today you would lose (0.10) from holding Cheche Group Class or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. Safety Shot
Performance |
| Timeline |
| Cheche Group Class |
| Safety Shot |
Cheche Group and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Safety Shot
The main advantage of trading using opposite Cheche Group and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Cheche Group vs. Zhihu Inc ADR | Cheche Group vs. Edgewell Personal Care | Cheche Group vs. National CineMedia | Cheche Group vs. RBC Bearings Incorporated |
| Safety Shot vs. ArcelorMittal SA ADR | Safety Shot vs. Robix Environmental Technologies | Safety Shot vs. Modine Manufacturing | Safety Shot vs. Lucid Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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