Correlation Between Exchange Bankshares and Cheche Group

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

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

Diversification Opportunities for Exchange Bankshares and Cheche Group

0.24

Correlation Coefficient

Exchange Bankshares  Cheche Group

Modest diversification

The 3 months correlation between Exchange and Cheche is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares 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 Exchange Bankshares 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 Exchange Bankshares 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 Exchange Bankshares i.e., Exchange Bankshares and Cheche Group go up and down completely randomly.

Pair Corralation between Exchange Bankshares and Cheche Group

Given the investment horizon of 90 days Exchange Bankshares is expected to generate 17.59 times less return on investment than Cheche Group. But when comparing it to its historical volatility, Exchange Bankshares is 13.83 times less risky than Cheche Group. It trades about 0.02 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,037  in Cheche Group Class on October 25, 2024 and sell it today you would lose (950.00) from holding Cheche Group Class or give up 91.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.36%
Values	Daily Returns

Exchange Bankshares  vs.  Cheche Group Class

Exchange Bankshares

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Bankshares are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Exchange Bankshares demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Cheche Group Class

Risk-Adjusted Performance

5 of 100

Insignificant

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 fragile fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exchange Bankshares and Cheche Group

The main advantage of trading using opposite Exchange Bankshares and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bankshares 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 Exchange Bankshares 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.