Correlation Between Cheche Group and YY
Can any of the company-specific risk be diversified away by investing in both Cheche Group and YY 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 YY 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 YY Inc Class, you can compare the effects of market volatilities on Cheche Group and YY 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 YY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and YY.
Diversification Opportunities for Cheche Group and YY
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheche and YY is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class 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 YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Cheche Group i.e., Cheche Group and YY go up and down completely randomly.
Pair Corralation between Cheche Group and YY
Considering the 90-day investment horizon Cheche Group is expected to generate 1.36 times less return on investment than YY. In addition to that, Cheche Group is 1.36 times more volatile than YY Inc Class. It trades about 0.12 of its total potential returns per unit of risk. YY Inc Class is currently generating about 0.21 per unit of volatility. If you would invest 3,405 in YY Inc Class on September 1, 2024 and sell it today you would earn a total of 480.00 from holding YY Inc Class or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheche Group Class vs. YY Inc Class
Performance |
| Timeline |
| Cheche Group Class |
| YY Inc Class |
Cheche Group and YY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and YY
The main advantage of trading using opposite Cheche Group and YY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, YY 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 YY will offset losses from the drop in YY's long position.| Cheche Group vs. ServiceNow | Cheche Group vs. Old Dominion Freight | Cheche Group vs. Procter Gamble | Cheche Group vs. Eastman Kodak Co |
| YY vs. Weibo Corp | YY vs. DouYu International Holdings | YY vs. Tencent Music Entertainment | YY vs. Autohome |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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