Correlation Between Sunlands Technology and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology 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 Sunlands Technology and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlands Technology Group and Cheche Group Class, you can compare the effects of market volatilities on Sunlands Technology 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 Sunlands Technology with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Cheche Group.
Diversification Opportunities for Sunlands Technology and Cheche Group
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunlands and Cheche is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group 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 Sunlands Technology 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 Sunlands Technology Group 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 Sunlands Technology i.e., Sunlands Technology and Cheche Group go up and down completely randomly.
Pair Corralation between Sunlands Technology and Cheche Group
Considering the 90-day investment horizon Sunlands Technology Group is expected to generate 0.9 times more return on investment than Cheche Group. However, Sunlands Technology Group is 1.11 times less risky than Cheche Group. It trades about 0.02 of its potential returns per unit of risk. Cheche Group Class is currently generating about -0.07 per unit of risk. If you would invest 864.00 in Sunlands Technology Group on November 9, 2024 and sell it today you would lose (199.00) from holding Sunlands Technology Group or give up 23.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunlands Technology Group vs. Cheche Group Class
Performance |
| Timeline |
| Sunlands Technology |
| Cheche Group Class |
Sunlands Technology and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Cheche Group
The main advantage of trading using opposite Sunlands Technology and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology 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.| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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