Correlation Between Cheche Group and Airship AI

Can any of the company-specific risk be diversified away by investing in both Cheche Group and Airship AI 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 Cheche Group and Airship AI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheche Group Class and Airship AI Holdings, you can compare the effects of market volatilities on Cheche Group and Airship AI 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 Cheche Group with a short position of Airship AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Airship AI.

Diversification Opportunities for Cheche Group and Airship AI

0.31

Correlation Coefficient

Cheche Group  Airship AI

Weak diversification

The 3 months correlation between Cheche and Airship is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Airship AI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airship AI Holdings and Cheche Group 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 Cheche Group Class are associated (or correlated) with Airship AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airship AI Holdings has no effect on the direction of Cheche Group i.e., Cheche Group and Airship AI go up and down completely randomly.

Pair Corralation between Cheche Group and Airship AI

Considering the 90-day investment horizon Cheche Group is expected to generate 11.18 times less return on investment than Airship AI. But when comparing it to its historical volatility, Cheche Group Class is 3.01 times less risky than Airship AI. It trades about 0.05 of its potential returns per unit of risk. Airship AI Holdings is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Airship AI Holdings on October 9, 2024 and sell it today you would earn a total of  258.00  from holding Airship AI Holdings or generate 93.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cheche Group Class  vs.  Airship AI Holdings

Cheche Group Class

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Airship AI Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Airship AI Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Airship AI reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheche Group and Airship AI

The main advantage of trading using opposite Cheche Group and Airship AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Airship AI 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 Airship AI will offset losses from the drop in Airship AI's long position.

The idea behind Cheche Group Class and Airship AI Holdings 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.