Correlation Between Cheche Group and SunOpta

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

Diversification Opportunities for Cheche Group and SunOpta

0.5

Correlation Coefficient

Cheche Group  SunOpta

Very weak diversification

The 3 months correlation between Cheche and SunOpta is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Cheche Group i.e., Cheche Group and SunOpta go up and down completely randomly.

Pair Corralation between Cheche Group and SunOpta

Considering the 90-day investment horizon Cheche Group Class is expected to under-perform the SunOpta. In addition to that, Cheche Group is 1.98 times more volatile than SunOpta. It trades about -0.04 of its total potential returns per unit of risk. SunOpta is currently generating about -0.02 per unit of volatility. If you would invest  751.00  in SunOpta on October 11, 2024 and sell it today you would lose (18.00) from holding SunOpta or give up 2.4% of portfolio value over 90 days.

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

Cheche Group Class  vs.  SunOpta

Cheche Group Class

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, Cheche Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SunOpta

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, SunOpta disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheche Group and SunOpta

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

The idea behind Cheche Group Class and SunOpta 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.