Correlation Between Cheche Group and Zillow Group
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Zillow Group 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 Zillow Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheche Group Warrant and Zillow Group Class, you can compare the effects of market volatilities on Cheche Group and Zillow Group 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 Zillow Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Zillow Group.
Diversification Opportunities for Cheche Group and Zillow Group
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cheche and Zillow is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Warrant and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group 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 Warrant are associated (or correlated) with Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of Cheche Group i.e., Cheche Group and Zillow Group go up and down completely randomly.
Pair Corralation between Cheche Group and Zillow Group
Assuming the 90 days horizon Cheche Group Warrant is expected to generate 8.1 times more return on investment than Zillow Group. However, Cheche Group is 8.1 times more volatile than Zillow Group Class. It trades about 0.03 of its potential returns per unit of risk. Zillow Group Class is currently generating about 0.27 per unit of risk. If you would invest 2.00 in Cheche Group Warrant on September 13, 2024 and sell it today you would lose (0.20) from holding Cheche Group Warrant or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cheche Group Warrant vs. Zillow Group Class
Performance |
| Timeline |
| Cheche Group Warrant |
| Zillow Group Class |
Cheche Group and Zillow Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheche Group and Zillow Group
The main advantage of trading using opposite Cheche Group and Zillow Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Zillow Group 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 Zillow Group will offset losses from the drop in Zillow Group's long position.| Cheche Group vs. CarsalesCom Ltd ADR | Cheche Group vs. Verra Mobility Corp | Cheche Group vs. Li Auto | Cheche Group vs. Hafnia Limited |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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