Correlation Between Cheche Group and CERo Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Cheche Group and CERo Therapeutics 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 CERo Therapeutics 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 CERo Therapeutics Holdings, you can compare the effects of market volatilities on Cheche Group and CERo Therapeutics 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 CERo Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and CERo Therapeutics.

Diversification Opportunities for Cheche Group and CERo Therapeutics

ChecheCERoDiversified AwayChecheCERoDiversified Away100%
0.35
  Correlation Coefficient

Weak diversification

The 3 months correlation between Cheche and CERo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and CERo Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CERo Therapeutics 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 CERo Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CERo Therapeutics has no effect on the direction of Cheche Group i.e., Cheche Group and CERo Therapeutics go up and down completely randomly.

Pair Corralation between Cheche Group and CERo Therapeutics

Considering the 90-day investment horizon Cheche Group is expected to generate 50.74 times less return on investment than CERo Therapeutics. But when comparing it to its historical volatility, Cheche Group Class is 9.13 times less risky than CERo Therapeutics. It trades about 0.03 of its potential returns per unit of risk. CERo Therapeutics Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.95  in CERo Therapeutics Holdings on October 21, 2024 and sell it today you would earn a total of  0.59  from holding CERo Therapeutics Holdings or generate 62.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy96.77%
ValuesDaily Returns

Cheche Group Class  vs.  CERo Therapeutics Holdings

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 050100150200250300
JavaScript chart by amCharts 3.21.15CCG CEROW
       Timeline  
Cheche Group Class 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Cheche Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.750.80.850.90.951
CERo Therapeutics 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CERo Therapeutics Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, CERo Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.0050.010.0150.020.025

Cheche Group and CERo Therapeutics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.88-8.89-5.91-2.930.04973.026.099.1612.23 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15CCG CEROW
       Returns  

Pair Trading with Cheche Group and CERo Therapeutics

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