Correlation Between Cheche Group and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Rocky Mountain 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 Rocky Mountain 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 Rocky Mountain Chocolate, you can compare the effects of market volatilities on Cheche Group and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Rocky Mountain.
Diversification Opportunities for Cheche Group and Rocky Mountain
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cheche and Rocky is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Rocky Mountain Chocolate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Chocolate 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Chocolate has no effect on the direction of Cheche Group i.e., Cheche Group and Rocky Mountain go up and down completely randomly.
Pair Corralation between Cheche Group and Rocky Mountain
Considering the 90-day investment horizon Cheche Group Class is expected to generate 0.97 times more return on investment than Rocky Mountain. However, Cheche Group Class is 1.03 times less risky than Rocky Mountain. It trades about 0.05 of its potential returns per unit of risk. Rocky Mountain Chocolate is currently generating about -0.09 per unit of risk. If you would invest 86.00 in Cheche Group Class on October 10, 2024 and sell it today you would earn a total of 2.00 from holding Cheche Group Class or generate 2.33% 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. Rocky Mountain Chocolate
Performance |
Timeline |
Cheche Group Class |
Rocky Mountain Chocolate |
Cheche Group and Rocky Mountain Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheche Group and Rocky Mountain
The main advantage of trading using opposite Cheche Group and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.Cheche Group vs. SL Green Realty | Cheche Group vs. Ardelyx | Cheche Group vs. Toro Co | Cheche Group vs. RBC Bearings Incorporated |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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