Correlation Between Chindata Group and EverQuote

Can any of the company-specific risk be diversified away by investing in both Chindata Group and EverQuote 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 Chindata Group and EverQuote into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chindata Group Holdings and EverQuote Class A, you can compare the effects of market volatilities on Chindata Group and EverQuote 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 Chindata Group with a short position of EverQuote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chindata Group and EverQuote.

Diversification Opportunities for Chindata Group and EverQuote

-0.23

Correlation Coefficient

Chindata Group  EverQuote

Very good diversification

The 3 months correlation between Chindata and EverQuote is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and EverQuote Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverQuote Class A and Chindata 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 Chindata Group Holdings are associated (or correlated) with EverQuote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverQuote Class A has no effect on the direction of Chindata Group i.e., Chindata Group and EverQuote go up and down completely randomly.

Pair Corralation between Chindata Group and EverQuote

If you would invest  790.00  in Chindata Group Holdings on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Chindata Group Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Chindata Group Holdings  vs.  EverQuote Class A

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

EverQuote Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EverQuote Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Chindata Group and EverQuote

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

The idea behind Chindata Group Holdings and EverQuote Class A 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.