Correlation Between Lowes Companies and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Lowes Companies 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 Lowes Companies and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowes Companies and Cheche Group Class, you can compare the effects of market volatilities on Lowes Companies 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 Lowes Companies with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Cheche Group.
Diversification Opportunities for Lowes Companies and Cheche Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lowes and Cheche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies 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 Lowes Companies 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and Cheche Group go up and down completely randomly.
Pair Corralation between Lowes Companies and Cheche Group
Considering the 90-day investment horizon Lowes Companies is expected to generate 0.35 times more return on investment than Cheche Group. However, Lowes Companies is 2.86 times less risky than Cheche Group. It trades about 0.3 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.01 per unit of risk. If you would invest 24,834 in Lowes Companies on October 26, 2024 and sell it today you would earn a total of 1,298 from holding Lowes Companies or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowes Companies vs. Cheche Group Class
Performance |
| Timeline |
| Lowes Companies |
| Cheche Group Class |
Lowes Companies and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Cheche Group
The main advantage of trading using opposite Lowes Companies and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes Companies 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.| Lowes Companies vs. Floor Decor Holdings | Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Home Depot |
| Cheche Group vs. Live Ventures | Cheche Group vs. Autohome | Cheche Group vs. Lowes Companies | Cheche Group vs. JetBlue Airways 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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