Correlation Between Xunlei and Cheche Group
Can any of the company-specific risk be diversified away by investing in both Xunlei 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 Xunlei and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xunlei Ltd Adr and Cheche Group Class, you can compare the effects of market volatilities on Xunlei 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 Xunlei with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xunlei and Cheche Group.
Diversification Opportunities for Xunlei and Cheche Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xunlei and Cheche is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Xunlei Ltd Adr 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 Xunlei 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 Xunlei Ltd Adr 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 Xunlei i.e., Xunlei and Cheche Group go up and down completely randomly.
Pair Corralation between Xunlei and Cheche Group
Given the investment horizon of 90 days Xunlei is expected to generate 8.91 times less return on investment than Cheche Group. But when comparing it to its historical volatility, Xunlei Ltd Adr is 8.5 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 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,037 in Cheche Group Class on October 25, 2024 and sell it today you would lose (950.00) from holding Cheche Group Class or give up 91.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.68% |
| Values | Daily Returns |
Xunlei Ltd Adr vs. Cheche Group Class
Performance |
| Timeline |
| Xunlei Ltd Adr |
| Cheche Group Class |
Xunlei and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xunlei and Cheche Group
The main advantage of trading using opposite Xunlei and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xunlei 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.| Xunlei vs. Travelzoo | Xunlei vs. Emerald Expositions Events | Xunlei vs. Ziff Davis | Xunlei vs. Direct Digital Holdings |
| Cheche Group vs. Procter Gamble | Cheche Group vs. TFI International | Cheche Group vs. National CineMedia | Cheche Group vs. Sphere Entertainment Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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