Correlation Between Snap and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Cheche Group Class, you can compare the effects of market volatilities on Snap 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 Snap with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Cheche Group.
Diversification Opportunities for Snap and Cheche Group
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and Cheche is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc 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 Snap 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 Snap Inc 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 Snap i.e., Snap and Cheche Group go up and down completely randomly.
Pair Corralation between Snap and Cheche Group
Given the investment horizon of 90 days Snap is expected to generate 1.75 times less return on investment than Cheche Group. In addition to that, Snap is 1.13 times more volatile than Cheche Group Class. It trades about 0.08 of its total potential returns per unit of risk. Cheche Group Class is currently generating about 0.16 per unit of volatility. If you would invest 78.00 in Cheche Group Class on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Cheche Group Class or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Cheche Group Class
Performance |
| Timeline |
| Snap Inc |
| Cheche Group Class |
Snap and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Cheche Group
The main advantage of trading using opposite Snap and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and Cheche Group Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cheche Group vs. Zillow Group Class | Cheche Group vs. Kanzhun Ltd ADR | Cheche Group vs. Outbrain | Cheche Group vs. TuanChe ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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