Correlation Between Cromwell Property and Cheche Group

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

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

Diversification Opportunities for Cromwell Property and Cheche Group

0.34

Correlation Coefficient

Cromwell Property  Cheche Group

Weak diversification

The 3 months correlation between Cromwell and Cheche is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class and Cromwell Property 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 Cromwell Property Group are associated (or correlated) with Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Cromwell Property i.e., Cromwell Property and Cheche Group go up and down completely randomly.

Pair Corralation between Cromwell Property and Cheche Group

Assuming the 90 days horizon Cromwell Property Group is expected to generate 0.32 times more return on investment than Cheche Group. However, Cromwell Property Group is 3.15 times less risky than Cheche Group. It trades about 0.24 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.06 per unit of risk. If you would invest  27.00  in Cromwell Property Group on October 26, 2024 and sell it today you would earn a total of  1.00  from holding Cromwell Property Group or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Cromwell Property Group  vs.  Cheche Group Class

Cromwell Property

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cromwell Property Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Cromwell Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cheche Group Class

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cromwell Property and Cheche Group

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

The idea behind Cromwell Property Group and Cheche 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.