Correlation Between Cheche Group and Target Hospitality
Can any of the company-specific risk be diversified away by investing in both Cheche Group and Target Hospitality 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 Target Hospitality 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 Target Hospitality Corp, you can compare the effects of market volatilities on Cheche Group and Target Hospitality 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 Target Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Target Hospitality.
Diversification Opportunities for Cheche Group and Target Hospitality
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cheche and Target is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Target Hospitality Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Hospitality Corp 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 Target Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Hospitality Corp has no effect on the direction of Cheche Group i.e., Cheche Group and Target Hospitality go up and down completely randomly.
Pair Corralation between Cheche Group and Target Hospitality
Considering the 90-day investment horizon Cheche Group Class is expected to generate 0.83 times more return on investment than Target Hospitality. However, Cheche Group Class is 1.2 times less risky than Target Hospitality. It trades about 0.1 of its potential returns per unit of risk. Target Hospitality Corp is currently generating about -0.08 per unit of risk. If you would invest 79.00 in Cheche Group Class on December 18, 2024 and sell it today you would earn a total of 21.00 from holding Cheche Group Class or generate 26.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cheche Group Class vs. Target Hospitality Corp
Performance |
Timeline |
Cheche Group Class |
Target Hospitality Corp |
Cheche Group and Target Hospitality Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheche Group and Target Hospitality
The main advantage of trading using opposite Cheche Group and Target Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, Target Hospitality 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 Target Hospitality will offset losses from the drop in Target Hospitality's long position.Cheche Group vs. Yoshitsu Co Ltd | Cheche Group vs. WK Kellogg Co | Cheche Group vs. United Natural Foods | Cheche Group vs. Albertsons Companies |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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