Correlation Between Cheche Group and Solidion Technology
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Solidion Technology 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 Solidion Technology 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 Solidion Technology, you can compare the effects of market volatilities on Cheche Group and Solidion Technology 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 Solidion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Solidion Technology.
Diversification Opportunities for Cheche Group and Solidion Technology
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cheche and Solidion is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Solidion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solidion Technology 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 Solidion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solidion Technology has no effect on the direction of Cheche Group i.e., Cheche Group and Solidion Technology go up and down completely randomly.
Pair Corralation between Cheche Group and Solidion Technology
Considering the 90-day investment horizon Cheche Group is expected to generate 2.88 times less return on investment than Solidion Technology. But when comparing it to its historical volatility, Cheche Group Class is 5.13 times less risky than Solidion Technology. It trades about 0.2 of its potential returns per unit of risk. Solidion Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Solidion Technology on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Solidion Technology or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. Solidion Technology
Performance |
| Timeline |
| Cheche Group Class |
| Solidion Technology |
Cheche Group and Solidion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Solidion Technology
The main advantage of trading using opposite Cheche Group and Solidion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Solidion Technology 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 Solidion Technology will offset losses from the drop in Solidion Technology's long position.| Cheche Group vs. Eldorado Gold Corp | Cheche Group vs. NioCorp Developments Ltd | Cheche Group vs. National Storage REIT | Cheche Group vs. Pinterest |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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