Correlation Between Highway Holdings and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Cheche 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 Highway Holdings and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Cheche Group Class, you can compare the effects of market volatilities on Highway Holdings and Cheche 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 Highway Holdings with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Cheche Group.
Diversification Opportunities for Highway Holdings and Cheche Group
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Cheche is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class and Highway Holdings 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 Highway Holdings Limited are associated (or correlated) with Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Highway Holdings i.e., Highway Holdings and Cheche Group go up and down completely randomly.
Pair Corralation between Highway Holdings and Cheche Group
Given the investment horizon of 90 days Highway Holdings is expected to generate 2.13 times less return on investment than Cheche Group. But when comparing it to its historical volatility, Highway Holdings Limited is 2.53 times less risky than Cheche Group. It trades about 0.14 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Cheche Group Class on October 12, 2024 and sell it today you would earn a total of 6.00 from holding Cheche Group Class or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Cheche Group Class
Performance |
| Timeline |
| Highway Holdings |
| Cheche Group Class |
Highway Holdings and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Cheche Group
The main advantage of trading using opposite Highway Holdings and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Cheche 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
| Cheche Group vs. Interpublic Group of | Cheche Group vs. Fluent Inc | Cheche Group vs. NETGEAR | Cheche Group vs. Boston Omaha Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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