Correlation Between Boston Beer and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Cheche Group Class, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Cheche Group.
Diversification Opportunities for Boston Beer and Cheche Group
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boston and Cheche is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer 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 Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Cheche Group go up and down completely randomly.
Pair Corralation between Boston Beer and Cheche Group
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Cheche Group. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.84 times less risky than Cheche Group. The stock trades about -0.27 of its potential returns per unit of risk. The Cheche Group Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Cheche Group Class on October 22, 2024 and sell it today you would earn a total of 0.00 from holding Cheche Group Class or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Cheche Group Class
Performance |
| Timeline |
| Boston Beer |
| Cheche Group Class |
Boston Beer and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Cheche Group
The main advantage of trading using opposite Boston Beer and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| Cheche Group vs. Hurco Companies | Cheche Group vs. Western Acquisition Ventures | Cheche Group vs. Suburban Propane Partners | Cheche Group vs. Atmos Energy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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