Correlation Between Hunter Creek and Cheche Group

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

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

Diversification Opportunities for Hunter Creek and Cheche Group

-0.74

Correlation Coefficient

Hunter Creek  Cheche Group

Pay attention - limited upside

The 3 months correlation between Hunter and Cheche is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Creek Mining 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 Hunter Creek 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 Hunter Creek Mining 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 Hunter Creek i.e., Hunter Creek and Cheche Group go up and down completely randomly.

Pair Corralation between Hunter Creek and Cheche Group

Given the investment horizon of 90 days Hunter Creek Mining is expected to generate 22.65 times more return on investment than Cheche Group. However, Hunter Creek is 22.65 times more volatile than Cheche Group Class. It trades about 0.1 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.09 per unit of risk. If you would invest  9.80  in Hunter Creek Mining on December 19, 2024 and sell it today you would lose (9.80) from holding Hunter Creek Mining or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Hunter Creek Mining  vs.  Cheche Group Class

Hunter Creek Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hunter Creek Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hunter Creek exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cheche Group Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 7 (%) 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 Hunter Creek and Cheche Group

The main advantage of trading using opposite Hunter Creek and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Creek 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 Hunter Creek Mining 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.