Correlation Between Cheche Group and Zillow Group

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

Diversification Opportunities for Cheche Group and Zillow Group

0.55

Correlation Coefficient

Cheche Group  Zillow Group

Very weak diversification

The 3 months correlation between Cheche and Zillow is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group Class 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 Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of Cheche Group i.e., Cheche Group and Zillow Group go up and down completely randomly.

Pair Corralation between Cheche Group and Zillow Group

Considering the 90-day investment horizon Cheche Group is expected to generate 1.55 times less return on investment than Zillow Group. In addition to that, Cheche Group is 1.62 times more volatile than Zillow Group Class. It trades about 0.07 of its total potential returns per unit of risk. Zillow Group Class is currently generating about 0.17 per unit of volatility. If you would invest  5,664  in Zillow Group Class on September 12, 2024 and sell it today you would earn a total of  2,538  from holding Zillow Group Class or generate 44.81% return on investment over 90 days.

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

Cheche Group Class  vs.  Zillow Group Class

Cheche Group Class

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Zillow Group Class

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group Class are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Zillow Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheche Group and Zillow Group

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

The idea behind Cheche Group Class and Zillow Group Class 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.