Correlation Between Cheche Group and HUMANA

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

Diversification Opportunities for Cheche Group and HUMANA

0.13

Correlation Coefficient

Cheche Group  HUMANA

Average diversification

The 3 months correlation between Cheche and HUMANA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Cheche Group i.e., Cheche Group and HUMANA go up and down completely randomly.

Pair Corralation between Cheche Group and HUMANA

Considering the 90-day investment horizon Cheche Group Class is expected to generate 5.72 times more return on investment than HUMANA. However, Cheche Group is 5.72 times more volatile than HUMANA INC. It trades about 0.2 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.08 per unit of risk. If you would invest  84.00  in Cheche Group Class on December 4, 2024 and sell it today you would earn a total of  56.00  from holding Cheche Group Class or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Cheche Group Class  vs.  HUMANA INC

Cheche Group Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cheche Group and HUMANA

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

The idea behind Cheche Group Class and HUMANA INC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.