Correlation Between Nextdoor Holdings and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Nextdoor 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 Nextdoor 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 Nextdoor Holdings and Cheche Group Warrant, you can compare the effects of market volatilities on Nextdoor 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 Nextdoor Holdings with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextdoor Holdings and Cheche Group.
Diversification Opportunities for Nextdoor Holdings and Cheche Group
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nextdoor and Cheche is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nextdoor Holdings and Cheche Group Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Warrant and Nextdoor 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 Nextdoor Holdings 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 Warrant has no effect on the direction of Nextdoor Holdings i.e., Nextdoor Holdings and Cheche Group go up and down completely randomly.
Pair Corralation between Nextdoor Holdings and Cheche Group
Given the investment horizon of 90 days Nextdoor Holdings is expected to generate 0.22 times more return on investment than Cheche Group. However, Nextdoor Holdings is 4.64 times less risky than Cheche Group. It trades about 0.03 of its potential returns per unit of risk. Cheche Group Warrant is currently generating about 0.01 per unit of risk. If you would invest 211.00 in Nextdoor Holdings on August 31, 2024 and sell it today you would earn a total of 31.00 from holding Nextdoor Holdings or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.41% |
| Values | Daily Returns |
Nextdoor Holdings vs. Cheche Group Warrant
Performance |
| Timeline |
| Nextdoor Holdings |
| Cheche Group Warrant |
Nextdoor Holdings and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextdoor Holdings and Cheche Group
The main advantage of trading using opposite Nextdoor Holdings and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextdoor 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.| Nextdoor Holdings vs. IAC Inc | Nextdoor Holdings vs. Yelp Inc | Nextdoor Holdings vs. Groupon | Nextdoor Holdings vs. Outbrain |
| Cheche Group vs. United Parks Resorts | Cheche Group vs. NiSource | Cheche Group vs. Transportadora de Gas | Cheche Group vs. Antero Midstream Partners |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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