Correlation Between MediaAlpha and Cheche Group
Can any of the company-specific risk be diversified away by investing in both MediaAlpha 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 MediaAlpha and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaAlpha and Cheche Group Class, you can compare the effects of market volatilities on MediaAlpha 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 MediaAlpha with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaAlpha and Cheche Group.
Diversification Opportunities for MediaAlpha and Cheche Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MediaAlpha and Cheche is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MediaAlpha 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 MediaAlpha 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 MediaAlpha 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 MediaAlpha i.e., MediaAlpha and Cheche Group go up and down completely randomly.
Pair Corralation between MediaAlpha and Cheche Group
Considering the 90-day investment horizon MediaAlpha is expected to generate 11.76 times less return on investment than Cheche Group. But when comparing it to its historical volatility, MediaAlpha is 6.6 times less risky than Cheche Group. It trades about 0.01 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,037 in Cheche Group Class on November 1, 2024 and sell it today you would lose (945.79) from holding Cheche Group Class or give up 91.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.7% |
| Values | Daily Returns |
MediaAlpha vs. Cheche Group Class
Performance |
| Timeline |
| MediaAlpha |
| Cheche Group Class |
MediaAlpha and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaAlpha and Cheche Group
The main advantage of trading using opposite MediaAlpha and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaAlpha 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.| MediaAlpha vs. Asset Entities Class | MediaAlpha vs. Yelp Inc | MediaAlpha vs. BuzzFeed | MediaAlpha vs. Vivid Seats |
| Cheche Group vs. Integral Ad Science | Cheche Group vs. BCE Inc | Cheche Group vs. Arrow Electronics | Cheche Group vs. Freedom Internet Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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